Auditing and Financial Management

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Open Recommendations

Management Report: Improvements Needed in Controls over the Processes Treasury and OMB Used to Prepare the U.S. Consolidated Financial Statements

GAO-22-105851
Aug 16, 2022
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5 Open Recommendations
Agency Affected Recommendation Status
Department of the Treasury We recommend that the Fiscal Assistant Secretary of the Treasury enhance existing policies and procedures to reasonably assure appropriate accounting and reporting for significant, unusual transactions or events, such as changes in legislation, affecting the CFS. (Recommendation 1)
Open
In commenting on our draft report, Treasury agreed that this recommendation is a process improvement that will increase the controls in the preparation of the CFS. In addition, Treasury stated that it will continue to focus its efforts on cost-beneficial solutions that Treasury believes will yield desired outcomes.
Department of the Treasury We recommend that the Fiscal Assistant Secretary of the Treasury enhance Treasury's procedures for analyzing uncorrected misstatements to identify all known uncorrected misstatements, by line item and on all of the affected current year and prior year financial statements, during the CFS preparation process. (Recommendation 2)
Open
In commenting on our draft report, Treasury agreed that this recommendation is a process improvement that will increase the controls in the preparation of the CFS. In addition, Treasury stated that it will continue to focus its efforts on cost-beneficial solutions that Treasury believes will yield desired outcomes.
Department of the Treasury We recommend that the Fiscal Assistant Secretary of the Treasury enhance Treasury's procedures for analyzing uncorrected misstatements to consider the effect of uncorrected misstatements by line item and on all of the affected current year and prior year financial statements. (Recommendation 3)
Open
In commenting on our draft report, Treasury agreed that this recommendation is a process improvement that will increase the controls in the preparation of the CFS. In addition, Treasury stated that it will continue to focus its efforts on cost-beneficial solutions that Treasury believes will yield desired outcomes.
Department of the Treasury We recommend that the Fiscal Assistant Secretary of the Treasury enhance existing procedures to reasonably assure that significant accounting policies are appropriately disclosed in CFS Note 1 and, as applicable, are consistent with significant component entity audited financial statements. (Recommendation 4)
Open
In commenting on our draft report, Treasury agreed that this recommendation is a process improvement that will increase the controls in the preparation of the CFS. In addition, Treasury stated that it will continue to focus its efforts on cost-beneficial solutions that Treasury believes will yield desired outcomes.
Department of the Treasury We recommend that the Fiscal Assistant Secretary of the Treasury enhance existing policies and procedures to support CFS disclosure decisions related to explaining significant fluctuations and disaggregating line item components in note tables. (Recommendation 5)
Open
In commenting on our draft report, Treasury agreed that this recommendation is a process improvement that will increase the controls in the preparation of the CFS. In addition, Treasury stated that it will continue to focus its efforts on cost-beneficial solutions that Treasury believes will yield desired outcomes.

Management Report: Improvements Needed in FDIC's Internal Control over Contract Documentation and Payment-Review Processes

GAO-22-105824
May 19, 2022
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2 Open Recommendations
Agency Affected Recommendation Status
Federal Deposit Insurance Corporation The Deputy Director of the Acquisition Services Branch of the Division of Administration should direct contracting officers to review and follow FDIC's existing policies and procedures for documenting and approving contract modifications to reasonably assure that FDIC sufficiently documents and properly supports contracts. (Recommendation 1)
Open
In commenting on our draft report, FDIC concurred with this recommendation. FDIC also stated that on December 30. 2021, an email was sent to the Acquisition Services Branch staff, including contracting officers, reminding staff about the importance of adequate modification documentation. In addition, concurrent with the effort to update the Acquisition Policy Manual, contracting officers will be reminded about the importance of following policies and procedures for documenting and approving contract modifications. We will evaluate these efforts during our audit of FDIC's 2022 financial statements.
Federal Deposit Insurance Corporation The Deputy Director of the Acquisition Services Branch of the Division of Administration should establish a process to periodically monitor the operating effectiveness of existing policies and procedures to reasonably assure that contracting officers sufficiently and accurately follow existing policies and procedures for contracts. (Recommendation 2)
Open
In commenting on our draft report, FDIC concurred with this recommendation. FDIC also stated that to ensure contracting officers and oversight managers comply with existing policies and procedures, it has instituted recurring independent reviews of contract billing transactions and individual contracts to assess contract administration, oversight management, and invoice review and payment. In addition, FDIC is working to implement a quality review process to provide reasonable assurance that contracting officers follow acquisition policies and procedures. FDIC stated that this process will include periodic reviews of contracting officer awards or modifications for compliance, documenting findings, and providing corrective actions. We will evaluate these efforts during our audit of FDIC's 2022 financial statements.

DOD Financial Management: Additional Actions Would Improve Reporting of Joint Strike Fighter Assets

GAO-22-105002
May 05, 2022
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12 Open Recommendations
Agency Affected Recommendation Status
Department of Defense The Under Secretary of Defense for Acquisition and Sustainment together with the F-35 Program Executive Officer, and in coordination with the Under Secretary of Defense (Comptroller), should develop and document a comprehensive strategy to address the JSF material weakness. The strategy should include (1) complete, detailed procedures; (2) time frames based on an analysis of the time needed to accomplish the procedures; and (3) resources required to design and implement the procedures. (Recommendation 1)
Open
DOD concurred with this recommendation and stated that to address this recommendation, F-35 Joint Program Office (JPO) has been coordinating with the Office of the Under Secretary of Defense for Acquisition and Sustainment (OUSD(A&S)) and the Office of the Under Secretary of Defense (Comptroller) (OUSD(C)) since fiscal year (FY) 2019 to execute a documented strategy for addressing the Joint Strike Fighter material weakness. The OUSD(C) approved corrective action plans (CAPs) to address identified gaps and known challenges with F-35 property accountability and financial reporting for program assets, and contain applicable milestones and estimated completion dates. Additionally, the F-35 JPO has increased resources dedicated to completing documented milestones, appointed people accountable to outcomes, and established cross-functional working groups to track progress in regularly scheduled meetings. JPO will continue to coordinate with OUSD(A&S) and OUSD(C), along with internal and external stakeholders, to add detail and fidelity to time frames, procedures, and resource requirements as needed. We will continue to follow-up with DOD on the status of this recommendation.
Department of Defense The Under Secretary of Defense for Acquisition and Sustainment together with the F-35 Program Executive Officer should develop and document a plan for verifying the completeness of JSF assets recorded in its APSR, including conducting an analysis and documenting the results on the feasibility of performing a wall-to-wall inventory to capture all JSF assets. (Recommendation 2)
Open
DOD concurred with this recommendation and stated that under the guidance of the Office of the Under Secretary of Defense for Acquisition and Sustainment (OUSD(A&S)), the F-35 Joint Program Office (JPO) is currently developing policies and procedures for both regularly scheduled inventory verification and record completeness in the JPO Accountable Property System of Record (APSR) to ensure capture and tracking of all Joint Strike Fighter assets. The JPO Inventory Management Plan will incorporate analysis of feasibility for wall-to-wall inventory versus alternate inventory procedures, taking consideration to minimize disruptions to F-35 Production manufacturing operations and movement of critical parts in the sustainment supply chain supporting F-35 flight operations. We will continue to follow-up with DOD on the status of this recommendation.
Department of Defense The Under Secretary of Defense for Acquisition and Sustainment together with the F-35 Program Executive Officer should develop procedures for performing physical inventories of JSF assets held at DOD and international partner facilities. To the extent that the procedures include the F-35 JPO relying on these facilities' staff to perform the physical inventory counts, the office should develop and document a plan that describes how the F-35 JPO plans to review the results of these inventory procedures in order to verify the existence and completeness of the recorded amounts of JSF assets at these locations. (Recommendation 3)
Open
DOD concurred with this recommendation and stated that the F-35 Joint Program Office (JPO) is actively coordinating with the Office of the Under Secretary of Defense for Acquisition and Sustainment (OUSD(A&S)) to make revisions to the F-35 Lifecycle Sustainment Plan, and publish related JPO Program Directives and Instructions for Program inventory management. These directives and instructions will include procedures for reporting and oversight of inventory held at DOD and international partner facilities. F-35 Program governance will be followed with the coordination of the JPO Inventory Management Plan and Memorandums of Agreement to establish roles and responsibilities for the completion of physical inventories and procedures verification of Joint Strike Fighter asset records for identified DOD and partner locations. We will continue to follow-up with DOD on the status of this recommendation.
Department of Defense The Under Secretary of Defense for Acquisition and Sustainment together with the F-35 Program Executive Officer should develop procedures for performing periodic physical inventories once the initial inventory count has been completed, including how DOD will assess the resources and time needed to conduct the inventories and any sampling methodology intended to be used. (Recommendation 4)
Open
DOD concurred with this recommendation and stated that under the guidance of the Office of the Under Secretary of Defense for Acquisition and Sustainment (OUSD(A&S)), the F-35 Joint Program Office (JPO) is currently developing policies and procedures for both regularly scheduled inventory verification and sampling methodologies. These policies and procedures will include addressing the resources and time needed to conduct the inventories. We will continue to follow-up with DOD on the status of this recommendation.
Department of Defense The Under Secretary of Defense for Acquisition and Sustainment together with the F-35 Program Executive Officer should develop procedures that outline the steps to periodically capture and verify the accuracy and completeness of JSF asset data from contractors and other DOD sources to be recorded in DPAS until a direct interface with the prime contractors' systems has been established. (Recommendation 5)
Open
DOD concurred with this recommendation and stated that the F-35 Joint Program Office (JPO) has been coordinating with the Office of the Under Secretary of Defense for Acquisition and Sustainment (OUSD(A&S)) and the Defense Logistics Agency since fiscal year 2019 to implement the Program's accountable property system of record, Defense Property Accountability System (DPAS). With guidance from the OUSD(A&S), the JPO is developing procedures for periodic capture, validation, and upload into DPAS of property data from contractor and DOD sources. The periodic data management processes will support F-35 property accountability until a direct system interface with contractors' systems, or other DOD-approved solutions are established. We will continue to follow-up with DOD on the status of this recommendation.
Department of Defense The Under Secretary of Defense for Acquisition and Sustainment together with the F-35 Program Executive Officer should finalize the business rules within DPAS to identify and populate default characters for missing data elements in JSF asset property records. (Recommendation 6)
Open
DOD concurred with this recommendation and stated that the F-35 Joint Program Office (JPO) has drafted business rules to identify and populate values for missing mandatory data elements where gaps exist in the Joint Strike Fighter (JSF) property data currently available from contractors and DOD sources. JPO will coordinate draft procedures for interim processes with the Under Secretary of Defense for Acquisition and Sustainment (OUSD(A&S)) for concurrence and finalize program business rules to support compliant JSF asset records in the Defense Property Accountability System (DPAS). We will continue to follow-up with DOD on the status of this recommendation.

VA Financial Management System: Additional Actions Needed to Help Ensure Success of Future Deployments

GAO-22-105059
Apr 25, 2022
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5 Open Recommendations
Agency Affected Recommendation Status
Department of Veterans Affairs The FMBT Deputy Assistant Secretary should establish target values for operational and customer experience metrics to allow the program to measure progress over time. (Recommendation 1)
Open
In commenting on our draft report, VA officials concurred with the recommendation and described actions they planned to take. Specifically, VA stated the Financial Management Business Transformation (FMBT) program will coordinate with stakeholders for each wave to ensure that operational and customer experience metrics will have baselines and targets established. However, it is not clear whether this action will address the recommendation. When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Department of Veterans Affairs The FMBT Deputy Assistant Secretary should report metrics in relation to target values to help ensure that operational benefits are delivered as intended. (Recommendation 2)
Open
In commenting on our draft report, VA officials concurred with the recommendation and described actions they planned to take. VA stated the Financial Management Business Transformation (FMBT) program will work with customer stakeholders to establish meaningful target values for each metric. However, it is not clear whether this action will address the recommendation. When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Department of Veterans Affairs The FMBT Deputy Assistant Secretary, in coordination with appropriate offices within VA, should facilitate the increase of workforce skills and competencies through user completion of core competency training. (Recommendation 3)
Open
In commenting on our draft report, VA officials concurred with the recommendation and described some actions already taken. Specifically, the Financial Management Business Transformation (FMBT) program began tracking core competency training attendance as part of their Operational Readiness Criteria with established thresholds. If attendance thresholds are not met, it is escalated to the customer wave sponsor and/or program advisor, and the Executive Sponsor. However, it is not clear whether this action will address the recommendation. When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Department of Veterans Affairs The FMBT Deputy Assistant Secretary should ensure that the FMBT program's organizational change management activities assess the readiness for change by conducting organizational change assessments as planned. (Recommendation 4)
Open
In commenting on our draft report, VA officials concurred with the recommendation and described actions they planned to take. VA stated the Financial Management Business Transformation (FMBT) program will deploy the organizational change assessments as planned within the integrated project schedule. However, it is not clear whether this action will address the recommendation. When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Department of Veterans Affairs The FMBT Deputy Assistant Secretary should ensure that the FMBT program's organizational change management activities adequately assess the results of change by following through on plans to align customer experience questions with organizational change assessments. (Recommendation 5)
Open
In commenting on our draft report, VA officials concurred with the recommendation and described some actions already taken. The Financial Management Business Transformation (FMBT) program has revised the operational needs question in the organizational change assessment and used the updated question in the first organizational change assessment for the Veterans Benefits Administration General Operating Expenses wave. However, it is not clear whether this action will address the recommendation. When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
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