Auditing and Financial Management

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Management Report: Internal Revenue Service Needs to Improve Financial Reporting and Information System Controls
GAO-21-401R
May 04, 2021
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1 Open Recommendations
Agency Affected Recommendation Status
Internal Revenue Service The Commissioner of the Internal Revenue Service should reasonably assure that reviews of external third parties' systems reference current documentation that supports IRS assessments of risk. (Recommendation 1)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

Financial Audit: Bureau of the Fiscal Service's FY 2020 Schedules of the General Fund
GAO-21-362
Apr 15, 2021
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3 Open Recommendations
Agency Affected Recommendation Status
Other The Commissioner of Fiscal Service should design and implement procedures to periodically review and maintain documentation to support account attributes for all active TASs to reasonably assure that activity recorded to each account is properly recognized in the Schedules of the General Fund. (Recommendation 1)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Other The Commissioner of Fiscal Service should design and implement procedures to reasonably assure that federal agencies reconcile their account balances per their internal records to CARS at the appropriate detailed level to provide for accurate reporting of line items on the Schedules of the General Fund. (Recommendation 2)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Other The Commissioner of Fiscal Service should establish controls to restrict access to each TAS to only those federal agencies to which the account belongs. (Recommendation 3)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

DOD Financial Management: Continued Efforts Needed to Correct Material Weaknesses Identified in Financial Statement Audits
GAO-21-157
Oct 13, 2020
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5 Open Recommendations
Agency Affected Recommendation Status
Department of Defense 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)
Open
DOD concurred with this recommendation and stated that the Corrective Action Plan (CAP) template includes data elements defined in OMB Circular A-123, except for the data element related to the year the deficiency was first identified. DOD stated that this missing data element will be added to the CAP template during 2020.
Department of Defense ODCFO should update the NFR Database with a field to record the year deficiencies are first identified. (Recommendation 2)
Open
DOD concurred with this recommendation and stated that a single data field to record the year the deficiency was first identified will be added to the Notice of Findings and Recommendations (NFR) Database during 2020.
Department of Defense 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)
Open
DOD partially concurred with this recommendation and stated that it ensures that a Notice of Findings and Recommendations (NFR) is appropriately linked to the correct Corrective Action Plan (CAP) and that data elements missing from CAPs are identified and communicated to components through its CAP quality and monthly data control review processes. However, this process did not always identify data elements that were not included in the CAPs it reviewed and its CAP review checklist does not have questions specifically related to whether the CAPs were linked to the correct NFRs in the database. DOD also stated that the CAP quality review process ensures that components document their rationale for accepting risk, risk response, and risk identification for deferring remediation activity associated with low-impact deficiencies. However, we continue to believe that including appropriate steps in the CAP review process, such as reviewing the components' risk acceptance rationale for reasonableness and appropriateness, are needed and that our recommendation is valid.
Department of Defense ODCFO should update DOD guidance to instruct DOD and components to document root-cause analysis when needed to address deficiencies auditors identified. (Recommendation 4)
Open
DOD concurred with this recommendation and stated that it will update the appropriate DOD guidance to specifically instruct that a Corrective Action Plan include documented evidence that a root-cause analysis was conducted and an explanation as to how it was conducted.
Department of Defense 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)
Open
DOD did not concur with this recommendation and stated that this action is already being performed. However, DOD's process does not include steps to determine how long exceptions have existed, and as a result, DOD lacks important information regarding the timeliness of efforts to resolve them.

Financial Management: DOD Needs to Implement Comprehensive Plans to Improve Its Systems Environment
GAO-20-252
Sep 30, 2020
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6 Open Recommendations
Agency Affected Recommendation Status
Department of Defense The Secretary of Defense should direct the Chief Management Officer and other entities, as appropriate, to establish measures to determine if the department is succeeding in achieving its goal to improve its financial management systems. Specifically, it should document targets and time frames to define the level of performance to be achieved. It should also document how DOD plans to measure expected outcomes by identifying data sources, how it plans to measure values, and how DOD plans to verify and validate measured values. (Recommendation 1)
Open
The department concurred with this recommendation and, in January and April 2021, described actions it planned to take to address it. Specifically, the department stated that its financial management functional strategy documents the goals and objectives for the financial management domain. Further, according to the department, while the functional strategy describes specific initiatives, the document does not include targets and timeframes with associated performance measures. The department added that the Office of the Undersecretary for Defense (Comptroller) needs to define the mechanisms by which these measures will be captured and monitored and provided an estimated completion date of October 2021. We will continue to follow-up on the status of this recommendation, as appropriate.
Department of Defense The Secretary of Defense should direct the Chief Management Officer and other entities, as appropriate, to establish a specific time frame for developing an enterprise road map to implement its financial management systems strategy, and ensure that it is developed. The road map should document the current and future states at a high level, from an architecture perspective, and present a transition plan for moving from the current to the future in an efficient, effective manner. The road map should discuss performance gaps, resource requirements, and planned solutions, and it should map DOD's financial management systems strategy to projects and budget. The plan should also document the tasks, time frames, and milestones for implementing new solutions, and include an inventory of systems. (Recommendation 2)
Open
The department concurred with this recommendation and, in January and April 2021, described actions it planned to take to address it. Specifically, the department stated that it has an effort underway to develop enterprise transition plans by leveraging the business enterprise architecture to document the transition from the current to the future environment for the business mission area. The department provided an estimated completion date of October 2021 for this recommendation. This recommendation remains open and we will continue to follow-up with the department as appropriate.
Department of Defense The Secretary of Defense should direct the Chief Management Officer and other entities, as appropriate, to develop detailed migration plans for the Air Force's General Accounting and Finance System-Reengineered, Navy's Standard Accounting and Reporting System, and Army's Standard Finance System and the Standard Operation and Maintenance Army Research and Development System. (Recommendation 3)
Open
The department concurred with this recommendation and, in January and April 2021, described actions it planned to take to address it. Specifically, the department stated that it will review the guidance cited by GAO to develop a standard migration template and that military departments will report their status using a standard migration template. The department provided an estimated completion date of October 2021 for this recommendation. This recommendation remains open and we will continue to follow-up with the department as appropriate.
Department of Defense The Secretary of Defense should direct the Chief Management Officer and other entities, as appropriate, to establish performance goals that include performance indicators, targets and time frames, to monitor the status of efforts to address IT-related audit findings. (Recommendation 4)
Open
The department concurred with this recommendation and, in January and April 2021, described actions it planned to take to address it. Specifically, the department stated that it uses a tool to monitor and respond to information technology audit performance indicators. These include indicators such as notice of findings and recommendations issued and closed, corrective action plan development through validation, milestone performance, recurring issues, and high priority area remediation tracking. According to the department, it also needs to define performance goals for these indicators. The department provided an estimated completion date of July 2021 for this recommendation. The recommendation remains open and we will continue to follow-up with the department as appropriate.
Department of Defense The Secretary of Defense should direct the Chief Management Officer and other entities, as appropriate, to implement a mechanism for identifying financial management systems that support the preparation of the department's financial statements in the department's systems inventory and budget data, and identify a complete list of financial management systems. (Recommendation 5)
Open
The department concurred with this recommendation and, in January and April 2021, described actions it planned to take to address it. Specifically, the department stated that efforts are underway to consolidate the financial management systems inventory by leveraging the department's information technology repository. In addition, according to the department, it implemented new requirements associated with financial improvement and audit readiness audit remediation costs for the fiscal year 2022 budget execution submission in its information technology budgeting system, and it will continue to refine those requirements. Nevertheless, the department agreed that it needs to do more work to capture an accurate systems inventory for systems that support the preparation of the department's financial statements. The department provided an estimated completion date of July 2021 for this recommendation. This recommendation remains open and we will continue to follow-up as appropriate.
Department of Defense The Secretary of Defense should direct the Chief Management Officer and other entities, as appropriate, to ensure that the department limits investments in financial management systems to only what is essential to maintain functioning systems and help ensure system security until it implements the other recommendations in this report. (Recommendation 6)
Open
The department concurred with this recommendation and, in January and April 2021, described actions it planned to take to address it. The department stated that a team within the Defense Business Operations and Enterprise Business Operations Directorate within the Office of the DOD Chief Management Officer (CMO) was planning to evaluate the current defense business systems review and certification process in order to include additional criteria to ensure that investments align with the financial management systems strategy and enterprise roadmap. However, the department has not demonstrated how it will limit investments in financial management systems to only what is essential to maintain functioning systems and help ensure system security until it implements the other recommendations in this report. Further, the National Defense Authorization Act for Fiscal Year 2021 repealed the CMO position and the department needs to implement new statutory requirements regarding the future of the roles and responsibilities previously assigned to the CMO. These roles and responsibilities include, among other things, roles and responsibilities associated with the defense business systems review and certification process. The department provided an estimated completion date of October 2021 for this recommendation. This recommendation remains open and we will continue to follow-up with the department as appropriate.
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