Recommendation: ODCFO should update the CAP template provided in its guidance to assist components in developing CAPs to include the year deficiencies are first identified data element defined in the Implementation Guide for OMB Circular A-123. (Recommendation 1)

Agency: Department of Defense
Status: Open

Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

Recommendation: ODCFO should update the NFR Database with a field to record the year deficiencies are first identified. (Recommendation 2)

Agency: Department of Defense
Status: Open

Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

Recommendation: ODCFO should incorporate appropriate steps to improve its CAP review process, including ensuring that (1) data elements not included in CAPs are appropriately identified and communicated to components and resolved, (2) NFRs are appropriately linked to the correct CAPs to address them, and (3) components document their rationale for accepting the risk associated with certain deficiencies and appropriately identify such instances in the NFR Database. (Recommendation 3)

Agency: Department of Defense
Status: Open

Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

Recommendation: ODCFO should update DOD guidance to instruct DOD and components to document root-cause analysis when needed to address deficiencies auditors identified. (Recommendation 4)

Agency: Department of Defense
Status: Open

Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

Recommendation: ODCFO should include appropriate steps in its monthly NFR Database review process to evaluate and follow-up on previously identified exceptions to ensure that they are resolved timely. (Recommendation 5)

Agency: Department of Defense
Status: Open

Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

Recommendation: The Under Secretary of Defense (Comptroller) should, in collaboration with the Under Secretary of Defense (Acquisition and Sustainment), develop and implement a DOD-wide strategy to remediate real property asset control issues. (Recommendation 1).

Agency: Department of Defense
Status: Open

Comments: DOD concurred with this recommendation and stated that it was committed to placing increased leadership emphasis on real property asset controls to ensure mission readiness, audit readiness, testing for existence and completeness, and maintaining internal controls.

Recommendation: The Under Secretary of Defense (Comptroller) should, in collaboration with the Under Secretary of Defense (Acquisition and Sustainment), develop department-wide instructions for performing the E&C verifications. (Recommendation 2).

Agency: Department of Defense
Status: Open

Comments: DOD concurred with this recommendation and stated that it was committed to placing increased leadership emphasis on real property asset policies and instructions to ensure consistent and repeatable existence and completeness verifications.

Recommendation: We recommend that the Secretary of the Treasury ensure that the Fiscal Assistant Secretary enhances Treasury's procedures for the aggregate analysis to consider the impact of all amounts not obtained from significant entity audited financial statements on the reliability of the CFS and use the results to determine if audit coverage is needed for any information. (Recommendation 1)

Agency: Department of the Treasury
Status: Open

Comments: In commenting on our draft report, Treasury stated that it has already taken steps to address this recommendation by updating guidance to federal entities for the preparation of the fiscal year 2020 Agency Financial Reports or Performance and Accountability Reports. In addition, Treasury stated that it has drafted a memo to the Federal Accounting Standards Advisory Board to seek clarification of existing guidance related to reporting differences for federal entities that prepare financial reports according to FASB standards.

Recommendation: We recommend that the Secretary of the Treasury ensure that the Fiscal Assistant Secretary enhances Treasury's process for revising accounting and reporting policies to reasonably assure that financial information—including the SOCNP, Funds from Dedicated Collections note, and Other Liabilities note—is prepared in accordance with U.S. GAAP and sufficiently documented to allow effective management review. (Recommendation 2)

Agency: Department of the Treasury
Status: Open

Comments: In commenting on our draft report, Treasury stated that it has already taken steps to address this recommendation by updating guidance to federal entities for the preparation of the fiscal year 2020 Agency Financial Reports or Performance and Accountability Reports.

Recommendation: We recommend that the Secretary of the Treasury ensure that the Fiscal Assistant Secretary enhances existing procedures to reasonably assure that disclosures for financial information incorporated using accounting standards issued by FASB are prepared in accordance with U.S. GAAP, such as improving (1) the quantitative analysis to consider all FASB information included in the CFS, (2) the FASB questionnaire to consider all relevant disclosures and obtain responses from all significant component entities, and (3) procedures for sufficiently documenting analyses and conclusions related to FASB information in the CFS. (Recommendation 3)

Agency: Department of the Treasury
Status: Open

Comments: In commenting on our draft report, Treasury stated that it drafted a memo to the Federal Accounting Standards Advisory Board to seek clarification of existing guidance related to reporting differences for federal entities that prepare financial reports according to FASB standards.

Recommendation: The Secretary of the Air Force should develop and implement procedures for an ERM governance structure that includes oversight responsibilities for identifying, assessing, responding to, and reporting on the risks associated with agency material weaknesses from all relevant sources. These procedures should clearly demonstrate that risks associated with material weaknesses are considered by Air Force governance, as a whole, and are mitigated appropriately to achieve goals and objectives. (Recommendation 1)

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

Comments: The DOD concurred with this recommendation and highlighted steps taken or planned to address this recommendation. Specifically, in FY19, the Air Force assessed the current-state of the risk management programs throughout the Air Force and developed a maturity model, implementation plan, and a governance structure to comply with OMB A-123 requirements. These enhancements will be implemented and formalized in policy in FY20. Further, beginning in FY19, the Air Force Senior Assessment Team (SAT) and the Senior Management Council (SMC) monitored corrective action plans for material weaknesses identified internally and by independent public accountants, including their impact on the Air Force's ability to achieve its enterprise objectives. In addition, the Air Force developed a process for the SAT and the SMC to discuss corrective action plans for material weaknesses on a quarterly basis as opposed to an annual basis, which will be evidenced in the form of board briefings and meeting minutes. Additionally, in FY19 the Air Force engaged the Enterprise Productivity Improvement Council to serve as the Air Force Risk Management Council (RMC) to oversee enterprise risk management as defined by their Charter, which was signed in February 2020. The Air Force will refine its policies and procedures to clearly specify the risks associated with the material weaknesses being addressed by the Air Force governance boards. Due to the need for coordination across multiple Air Force organizations to seek input, approve, and concur with policy changes, the Air Force plans to refine the policies by September 2020 and publish the policies by September 2021.

Recommendation: The Secretary of the Air Force should develop policies or procedures for assessing internal control to require (1) clearly delineating who within the Air Force is responsible for evaluating the internal control components and principles, how often they are to perform the evaluation, the level (e.g., entity or transactional) of the evaluation, what objectives are covered in the assessment, to whom to communicate the results if they are relevant to others performing assessments of internal control, and what guidance to follow; (2) documenting management's determination of whether each component and principle is designed, implemented, and operating effectively; and (3) documenting management's determination of whether components are operating together in an integrated manner. (Recommendation 2)

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

Comments: The DOD concurred with this recommendation and described steps taken or planned to address the recommendation. The Air Force SAF/FM performs both entity-level control assessments against all internal control components and principles and performs process level control assessments for internal controls over financial reporting and financial systems. The Air Force Audit Agency and the Air Force Inspector General have performed assessments related to operations and compliance. The Air Force will document those roles and responsibilities in formal policies. Due to the need for coordination across multiple Air Force organizations to seek input, approve, and concur with policy changes, the Air Force plans to refine the policies by September 2020 and publish the policies by September 2021.

Recommendation: The Secretary of the Air Force should develop policies or procedures for assessing internal control to require the use of test plans that (1) tie back to specific objectives to be achieved as included in the Business Operations Plan; (2) specify the nature, scope, and timing of procedures to conduct under the OMB Circular No. A-123 assessment process; and (3) reflect a consideration of prior year self-identified control deficiencies and results of internal and external audits. (Recommendation 3)

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

Comments: The DOD concurred with this recommendation and described steps taken or planned to address this recommendation. The Air Force test plans for internal controls over financial reporting and financial systems tie back to their relevant risk frameworks embedded in authoritative audit guidance. The framework used for financial reporting is the Financial Audit Manual, and the framework used for financial systems is the Federal Information Systems Controls Audit Manual, and include the nature, scope and timing of procedures performed. The Air Force's process-level internal control test plans are aligned with business process-level risks and objectives and are not directly associated with the Air Force's strategic objectives. The Air Force Business Operations Plan identifies strategic objectives, not business process-level objectives. Additionally, the Air Force considers previously identified internal control deficiencies in its annual documented internal control assessment scoping process. The Air Force will refine its policies and procedures regarding the use of test plans including operational and compliance controls. Due to the need for policy, procedure, and documentation updates required for operational and compliance controls, and the coordination across multiple Air Force organizations to seek input, approve, and concur with policy changes, the Air Force plans to refine policies, procedures, and documentation by September 2021 and publish the associated policies by September 2022.

Recommendation: The Secretary of the Air Force should develop policies or procedures for assessing internal control to require SAF/FM to validate (1) the number of organizational units reporting for its overall internal control assessment; (2) how control procedures were tested, what results were achieved, and how conclusions were derived from those results; and (3) whether the results used to compile the current year report are based on current fiscal year's assessments. (Recommendation 4)

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

Comments: The DOD concurred with this recommendation. The Air Force will design policies and procedures to determine assessable units and verify that results are current on an annual basis. Due to the need to reevaluate the Air Force's assessable unit structure and the associated change management that will be necessary to implement the changes to sustain an effective program, the Air Force plans to refine the policies by September 2021 and publish the policies by September 2022.

Recommendation: The Secretary of the Air Force should develop policies or procedures for assessing internal control to require SAF/FM to assess how waivers affect the current year assessment of internal control, the determination of systemic weaknesses, and the compilation of the Air Force's overall Statement of Assurance. (Recommendation 5)

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

Comments: The DOD concurred with this recommendation. The Air Force will design policies and procedures to consider the impact of waivers to the overall assessment of the system of internal control. Due to the need for coordination across multiple Air Force organizations to seek input, approve, and concur with policy changes, the Air Force plans to refine the policies by September 2020 and publish the policies by September 2021.

Recommendation: The Secretary of the Air Force should require that developers of the policy and related guidance associated with designing the procedures for conducting OMB Circular No. A-123 assessments receive recurring training and are appropriately skilled in conducting internal control assessments and are familiar with Standards for Internal Control in the Federal Government. (Recommendation 6)

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

Comments: The DOD concurred with this recommendation and described steps taken or planned to address the recommendation. Specifically, the Air Force is implementing multiple changes to the Air Force's ERM and internal control program, including improved governance, standardized processes and documentation for enterprise risk management, entity-level and process-level controls, training, fraud risk management, and data quality management. Training content in FY20 was updated to reflect additional information, including definitions for internal controls and considerations for determining material weaknesses for operations. The Air Force will continue to update its the policies, guidance, and training to coincide with the current progress of the program. The Air Force will continue to refine the audience of its training to verify that those responsible for implementing and assessing ERM and internal controls are trained sufficiently. Due to the need for policy, procedure, documentation, and training updates required for operational and compliance controls, and the coordination across multiple Air Force organizations to seek input, approve, and concur with policy changes, the Air Force plans to refine the policies, procedures, documentation, and training by September 2021 and publish the associated policies by September 2022.

Recommendation: The Secretary of the Air Force should analyze all definitions included in Air Force ERM and internal control assessment policy and related guidance to ensure that all definitions and concepts are defined correctly. (Recommendation 7)

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

Comments: The DOD concurred with this recommendation. The Air Force will verify that all definitions and concepts in its policies are current and consistent with other authoritative guidance. Due to the need for coordination across multiple Air Force organizations to seek input, approve, and concur with policy changes, the Air Force plans to refine the policies by September 2020 and publish the policies by September 2021.

Recommendation: The Secretary of the Air Force should require SAF/FM to design recurring training for those who will assess internal control that (1) includes enhancing their skills in evaluating the internal control system and documenting results; (2) reflects all OMB Circular No. A-123 requirements, such as those related to identifying objectives, evaluating deficiencies, and determining material weaknesses; and (3) is provided to all who are responsible for performing internal control assessments. (Recommendation 8)

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

Comments: The DOD concurred with this recommendation and described actions taken or planned to address the recommendation. Specifically, the Air Force performs annual training to Major Commands, Direct Reporting Units, and Functional Executives. In FY20, the Air Force included business process assessable leads in this training. The Air Force plans to continue to refine the audience of its training to verify that those responsible for implementing and assessing ERM and internal controls are trained sufficiently by September 2021.

Recommendation: The Secretary of the Air Force should develop policy or procedures consistent with OMB Circular No. A-123 to assess the system of internal control using a risk-based approach. (Recommendation 9)

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

Comments: The DOD concurred with this recommendation and described actions taken or planned to address the recommendation. Specifically, the Air Force's scoping procedures, beginning in FY19, consider materiality, both quantitative and qualitative risk, as well as risks identified in the enterprise risk management process. The Air Force assesses internal controls over financial reporting and financial systems using a risk-based approach as evidenced currently in documented procedures and testing templates. The Air Force will refine its procedure documentation to include the assessment of internal controls over operations and compliance using a risk-based approach. Due to the need for policy, procedure, and documentation updates required for operational and compliance controls, and the coordination across multiple Air Force organizations to seek input, approve, and concur with policy changes, the Air Force plans to refine the policies, procedures, and documentation by September 2021 and publish the associated policies by September 2022.

Recommendation: The Secretary of the Air Force should develop procedures to assess internal control over processes related to mission-critical assets, including (1) tests of design that evaluate whether controls are capable of achieving objectives, (2) tests of effectiveness only after a favorable assessment of the design of the control, and (3) a baseline that has accurate descriptions of business processes and identifies key internal controls as designed by management to respond to risks. (Recommendation 10)

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

Comments: The DOD concurred with this recommendation and described actions taken or planned to address the recommendation. The Air Force documents processes and assesses internal controls over financial reporting and financial systems related to mission critical assets that includes determinations as to internal control design, implementation, operating effectiveness and risks. The Air Force will enhance its approach for documenting processes and assessing internal controls over operations and compliance not related to financial reporting and financial systems through policy. Due to the need for policy, procedure, and documentation updates required for operational and compliance controls related to mission-critical assets, and the coordination across multiple Air Force organizations to seek input, approve, and concur with policy changes, the Air Force plans to refine the policies, procedures, and documentation by September 2021 and publish the associated policies by September 2022.

Recommendation: The Secretary of the Air Force should establish a process and reporting lines of all the sources of information, including reviews performed of internal control processes related to mission-critical assets, that will be considered in the Secretary's Statement of Assurance. (Recommendation 11)

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

Comments: The DOD concurred with this recommendation. The Air Force reports material weaknesses in internal controls over financial reporting and financial systems related to mission critical assets through SAF/FM, but it will solidify its reporting channels for material weaknesses in internal controls over operations and compliance through policy. Due to the need for policy, procedure, documentation, and training updates required to appropriately report deficiencies in internal control over operations and compliance, and the coordination across multiple Air Force organizations to seek input, approve, and concur with policy changes, the Air Force plans to refine the policies, procedures, documentation, and training by September 2021 and publish the associated policies by September 2022.

Recommendation: The Secretary of the Air Force should develop procedures to require coordination between business process leads and the Air Force's unit managers to ensure that mission-critical asset–related internal control deficiencies are considered in the unit managers' assessments of internal control and related supporting statements of assurance. These procedures should include how, when, and with what frequency the results from the business process internal control reviews should be provided to relevant organizational units for consideration in their respective assurance statements. (Recommendation 12)

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

Comments: The DOD concurred with this recommendation. The Air Force will develop procedures to enhance communication between business process leads and Air Force unit managers to verify that deficiencies are reported appropriately in supporting statements of assurance. Due to the need for coordination across multiple Air Force organizations to seek input, approve, and concur with policy changes, as well as the change management needed to implement additional communications and protocol processes, the Air Force plans to refine the policies by September 2021 and publish the policies by September 2022.

Recommendation: We recommend that the Commissioner of Internal Revenue update and implement policies and procedures for developing a courier contingency plan to prohibit managers responsible for overseeing the preparation of taxpayer receipts for deposits from also transporting them to financial institutions. (Recommendation 20-01)

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

Comments: The IRS agreed with this recommendation and stated that the Wage and Investment organization will update the Courier Contingency Plan polices and procedures to provide for appropriate segregation of duties or other curative measures.

Recommendation: We recommend that the Commissioner of Internal Revenue establish and implement manual refund procedures to direct (1) initiators to document (e.g., record on the taxpayers' accounts or annotate on the related manual refund forms) the justification for bypassing the IAT tool warning related to potential duplicate tax refunds on taxpayers' accounts and (2) managers to monitor whether such warnings were bypassed and review the justifications for reasonableness prior to approving manual refund forms. (Recommendation 20-02)

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

Comments: The IRS agreed with this recommendation and stated that the Wage and Investment organization agrees that actions need to occur to address duplicate tax refund conditions through improved manual refund procedures to require (1) initiator to document the justification for bypassing the Integrated Automated Technologies (IAT) tool warning related to potential duplicate tax refunds on taxpayers' accounts and (2) managers to review the justification documented for bypassing the IAT tool warning for reasonableness prior to approving manual refund forms. However, IRS also stated that it was unable to commit to implementing a corrective action plan at this time due to budgetary constraints on system enhancements.

Recommendation: We recommend that the Commissioner of Internal Revenue establish and implement actions to provide reasonable assurance that business units record the acceptance of goods and services in a timely manner in accordance with IRS policies and procedures. (Recommendation 20-03)

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

Comments: The IRS agreed with this recommendation and stated that the CFO organization will determine the reasons for business unit(s) non-compliance with established policies and procedures related to timely recording of receipts and acceptance of goods and services and, based on this evaluation, develop an action plan that once completed will provide additional tools to aid the business units in reasonably ensuring compliance with established requirements.

Recommendation: We recommend that the Commissioner of Internal Revenue establish and implement actions to provide reasonable assurance that the future lease payment amounts for non-cancellable operating leases are calculated correctly. (Recommendation 20-04)

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

Comments: The IRS agreed with this recommendation and stated that the CFO organization will update policies and procedures to include additional instructions needed to calculate the future lease payments due on the non-cancelable leases with terms greater than one year and will also create an automated calculation to determine the number of remaining months of lease payments.

Recommendation: The Secretary of the Treasury should ensure that the Fiscal Assistant Secretary enhances existing procedures for Treasury management to perform additional reviews for restatements, reclassifications, and adjustments to beginning net position to reasonably assure that they are properly supported and accurately reported. (Recommendation 2)

Agency: Department of the Treasury
Status: Open
Priority recommendation

Comments: As of the completion of our fiscal year 2019 audit of the consolidated financial statements of the U.S. government (CFS), we determined that this recommendation remains open. Treasury enhanced its procedures to include additional management reviews, particularly the Financial Reports and Advisory Division Director, for restatements, reclassifications, and adjustments to beginning net position. Although FRAD took steps to enhance its review procedures, the additional review did not prevent FRAD from including descriptions in the draft CFS that were not supported by entity financial statements or from excluding some information from the CFS notes. Further steps are needed to define procedures to ensure consistent and accurate treatment of restatements, reclassifications, and adjustments to beginning net position in the CFS. We will follow-up on progress made by Treasury as part of our fiscal year 2020 CFS audit.

Recommendation: The Secretary of the Treasury should ensure that the Fiscal Assistant Secretary, working in coordination with the Controller of OMB, establishes effective processes and procedures to reasonably assure that appropriate information regarding legal contingency losses is reported in the CFS. (Recommendation 4)

Agency: Department of the Treasury
Status: Open
Priority recommendation

Comments: As of the completion of our fiscal year 2019 audit of the consolidated financial statements of the U.S. government (CFS), we determined that this recommendation remains open. Treasury and OMB (1) increased guidance to federal entities in the Treasury Financial Manual section 2-4700; (2) included an illustrative Contingent Loss Table in OMB Circular No. A-136 for agencies to use as guidance when reporting probable and reasonably possible losses; (3) provided guidance to agencies through monthly Central Reporting Team (CRT) meetings with the agencies' financial reporting staff and at the Government Financial Management Conference; (4) communicated regularly with Department of Justice officials regarding the preparation of the government-wide legal representation letter; and (5) increased the number of Treasury staff performing the legal letter analysis. However, we noted inconsistencies among the significant component entities' financial statement note disclosures, management schedules, and legal representation letters, and the legal contingency loss information reported in the CFS, as well as inconsistencies between entities' year-end management schedules/legal representation letters and the final government-wide legal representation letter. We will follow-up on progress made by Treasury as part of our fiscal year 2020 CFS audit.

Recommendation: The Commissioner of Fiscal Service should develop and implement a mechanism to reasonably assure that all the journal entries recorded in the Schedules of the General Fund general ledgers can be readily identified and traced, such as through a unique identifier, to determine the effect of a transaction on all applicable general ledger accounts and line items of the Schedules of the General Fund, including the budget deficit. (Recommendation 1)

Agency: Department of the Treasury: Bureau of the Fiscal Service
Status: Open
Priority recommendation

Comments: Fiscal Service concurred with the results of our audit. As of July 2020, Fiscal Service developed a remediation plan and efforts are underway to address this recommendation. We will continue to monitor the agency's actions to address this recommendation.

Recommendation: The Commissioner of Fiscal Service should develop and implement a mechanism to reasonably assure that payment transactions recorded in the Schedules of the General Fund general ledgers capture all of the key information needed, including payment schedules if applicable, to readily trace transactions to the information certified by the federal agency. (Recommendation 2)

Agency: Department of the Treasury: Bureau of the Fiscal Service
Status: Open

Comments: Fiscal Service concurred with the results of our audit. As of July 2020, Fiscal Service developed a remediation plan and efforts are underway to address this recommendation. We will continue to monitor the agency's actions to address this recommendation.

Recommendation: The Commissioner of Fiscal Service should develop and implement additional reporting requirements with related guidance for federal agencies that better align with the General Fund financial reporting objectives and enable Fiscal Service to capture the effect of a transaction on all applicable general ledger accounts and line items of the Schedules of the General Fund, including the budget deficit. (Recommendation 3)

Agency: Department of the Treasury: Bureau of the Fiscal Service
Status: Open
Priority recommendation

Comments: Fiscal Service concurred with the results of our audit. As of July 2020, Fiscal Service developed a remediation plan and efforts are underway to address this recommendation. We will continue to monitor the agency's actions to address this recommendation.

Recommendation: We recommend that the Commissioner of Fiscal Service develop and implement a process that would enable Fiscal Service to obtain the information necessary to effectively assess the effect of the Statement of Difference on the Schedules of the General Fund for those federal agencies that have not implemented the Central Accounting and Reporting System. (Recommendation 4)

Agency: Department of the Treasury: Bureau of the Fiscal Service
Status: Open
Priority recommendation

Comments: Fiscal Service concurred with the results of our audit. As of July 2020, Fiscal Service developed a remediation plan and efforts are underway to address this recommendation. We will continue to monitor the agency's actions to address this recommendation.

Recommendation: We recommend that the Commissioner of Fiscal Service design and implement procedures to evaluate risks and monitor internal controls over financial reporting relevant to the Schedules of the General Fund. (Recommendation 5)

Agency: Department of the Treasury: Bureau of the Fiscal Service
Status: Open

Comments: Fiscal Service concurred with the results of our audit. As of July 2020, Fiscal Service developed a remediation plan and efforts are underway to address this recommendation. We will continue to monitor the agency's actions to address this recommendation.

Recommendation: The Commissioner of Fiscal Service should develop and implement a mechanism for evaluating agencies' use of BETCs based on the enhanced guidance. (Recommendation 7)

Agency: Department of the Treasury: Bureau of the Fiscal Service
Status: Open

Comments: Fiscal Service concurred with the results of our audit. As of July 2020, Fiscal Service developed a remediation plan and efforts are underway to address this recommendation. We will continue to monitor the agency's actions to address this recommendation.

Recommendation: The Commissioner of Fiscal Service should design and implement procedures to (1) obtain and review supporting documentation for reported activity included on Agency Submission Forms and (2) assess the overall completeness of federal agency activity reported on Agency Submission Forms. (Recommendation 8)

Agency: Department of the Treasury: Bureau of the Fiscal Service
Status: Open

Comments: Fiscal Service concurred with the results of our audit. As of July 2020, Fiscal Service developed a remediation plan and efforts are underway to address this recommendation. We will continue to monitor the agency's actions to address this recommendation.

Recommendation: The Commissioner of Fiscal Service should design and implement procedures to periodically review all active Treasury accounts to determine whether they are valid and the related General Fund account balances are consistent with federal agency records. (Recommendation 10)

Agency: Department of the Treasury: Bureau of the Fiscal Service
Status: Open
Priority recommendation

Comments: Fiscal Service concurred with the results of our audit. As of July 2020, Fiscal Service developed a remediation plan and efforts are underway to address this recommendation. We will continue to monitor the agency's actions to address this recommendation.

Recommendation: The Commissioner of Fiscal Service should enhance current procedures for reviewing negative balances to include Treasury accounts with indefinite periods of availability. (Recommendation 11)

Agency: Department of the Treasury: Bureau of the Fiscal Service
Status: Open
Priority recommendation

Comments: Fiscal Service concurred with the results of our audit. As of July 2020, Fiscal Service developed a remediation plan and efforts are underway to address this recommendation. We will continue to monitor the agency's actions to address this recommendation.

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 2019 audit of the consolidated financial statements of the U.S. government (CFS), we determined that this recommendation remained open. Treasury believes that its current remediation plan, including its various corrective action plans (CAPs), is comprehensive, appropriate, and effective, with robust and ongoing monitoring processes in place. However, we continue to note that the CAPs in these three areas do not include sufficient steps 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 2020 CFS audit.

Recommendation: The IRS Commissioner should direct the appropriate IRS officials to strengthen the process for reasonably assuring that the Internal Revenue Manual (IRM) is reviewed annually to align with the current control procedures and guidance being implemented by agency personnel. This should include a mechanism for reasonably assuring that program owner directors (1) review their respective program control activities and related guidance annually and timely update the IRM as needed, (2) document their reviews, and (3) utilize interim guidance and supplemental guidance correctly for their intended purposes.

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

Comments: IRS's actions to address this recommendation are ongoing. During fiscal year 2018, IRS created an annual Internal Revenue Manual (IRM) review and certification requirement to reasonably assure that all IRM sections align with the current control procedures and guidance that IRS personnel are implementing. In addition, the Small Business/Self-Employed (SB/SE) and Tax Exempt & Government Entities (TE/GE) organizations developed action plans to achieve substantial compliance with this requirement. During fiscal year 2019, the SB/SE organization completed its action plan; however, IRS officials stated that the TE/GE organization will complete its action plan during fiscal year 2020. Further, in fiscal year 2019, the Large Business & International organization reviewed and analyzed the results of its involvement in the annual IRM certification process. Based on the results of its analysis, the organization developed an action plan to achieve substantial compliance with the IRM review and certification requirement, which IRS officials stated it will complete by December 2021.

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 2019 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 2020 financial statement audit.