Audit Reports

Clifton Gunderson recommended that DOT management continue to periodically monitor and analyze OA's use of journal entries to ensure consistent implementation of the department-wide JE policy in conjunction with OA's financial management

Clifton Gunderson recommended that DOT management work with DOT OAs to review and/or refine their financial reporting processes so that the journal entries are recorded through the appropriate subsidiary systems. Adjusting journal entries should only be used for limited transactions, such as parent/child/corpus, quarterly accruals, and unusual one-time entries

Clifton Gunderson recommended that DOT management direct the OAs to take ownership of the journal entries affecting their financial statements. In addition, the cause for the underlying data to be incorrectly recorded in the first place should be researched and rectified. The OA's accounting and financial reporting policies should also be revised to ensure that all journal vouchers are reviewed by the OA's financial management office.

If the department's Oracle R12 upgrade takes place, Clifton Gunderson recommended that DOT management continue to define and re-engineer business processes that aid in the design and configuration of the upgrade. R12 should be configured as a fully integrated financial management system allowing for the use of event driven rules (based on Treasury Transaction codes) in the subsidiary modules. In addition, as part of the Oracle R12 upgrade, management should ensure that consistent and standardized data elements and data fields can be utilized to process and record transactions to achieve the greatest efficiency and consistency in its financial reporting for future years

Clifton Gunderson recommended that DOT management perform a periodic review to verify whether the use of the 00000 object class is consistent with pre-established policy. If the use is inconsistent with policy, the OAs should promptly reclassify amounts to the proper object class.

Clifton Gunderson recommended that DOT management continue to research the underlying cause of the null UDO activity. The activity recorded in the general ledger should be identified and corrected with a specific document number reported in the Delphi subsidiary system to properly account for the open obligations

Clifton Gunderson recommended that DOT management establish department-wide policies to achieve maximum efficiency and consistency for the OA's implementation of managerial cost accounting

Clifton Gunderson recommended that DOT management work with the OAs to develop cost finding techniques supported by cost accounting policies and procedures to compensate for the lack of a cost accounting financial system.

If the department's Oracle R12 upgrade takes place, Clifton Gunderson recommended that DOT management implement managerial cost accounting by standardizing the use of data elements and accounting fields to enable the aggregation and reporting of cost data

Clifton Gunderson recommended that DOT management develop and implement a process to monitor the status of funds which includes formalizing policies and procedures at the department level. Accordingly, the information should be disseminated to each OA to ensure that a systematic process is used to monitor the status of funds. The policies at a minimum should include the following; OA division/office including the level of the staff responsible for monitoring the status of funds, the frequency of the status of funds review, and the financial system and documentation (i.e., reports) that should be used to track and/or monitor the status of funds

If the department's Oracle R12 update takes place, Clifton Gunderson recommended that DOT management ensure that consistent and standardized data elements and fields can be used to process and record transactions to achieve the greatest efficiency and consistency in its financial reporting within the department for future years. In addition, the department should work with its Oracle vendors to ensure that standardized budget fund status reporting can be generated and is user friendly to further facilitate OA's funds control management and monitoring throughout the year and at period ends

Clifton Gunderson recommended that DOT management consider incorporating into its core financial system the elements of the Core Financial System Requirements Exposure Draft issued by OMB's Office of Federal Financial Management and its proposed requirements, such as the funds management requirements. According to OMB Memorandum M-10-26, issued in June 2010, this exposure draft remains in effect and federal agencies have an on-going responsibility to comply with them. The department should make certain, upon implementation of the Oracle R12 update if that occurs, that each funds management requirement included has been met to ensure that funds management from a financial system capability perspective has been adequately addressed

Clifton Gunderson recommended that DOT management standardize the inactive UDO review process throughout DOT by providing data downloads of inactive UDOs on a quarterly basis to OA management and require the OAs to report the status of these inactive UDOs to DOT management. Internal review of the inactive UDO's should focus on the inactive projects and contracts and could, for example, be incorporated into DOT's A-123 Appendix A implementation efforts. One technique could include a review of support documentation obtained by using a stratified sampling method. Timely follow up of areas with a higher degree of invalid obligations should be performed to ensure better compliance

Clifton Gunderson recommended that DOT management communicate to the OAs the need to be more diligent in following up with their contracting officers, project managers or grantees to identify and de-obligate unneeded obligations in a timely manner

Clifton Gunderson recommended that DOT management ensure that OAs perform the quarterly inactive project reviews to ascertain that inactive obligations are liquidated in a timely manner throughout the year. Particular attention should be paid to stagnant or closed projects with open obligations. Timely reconciliation with the OA's grantees or contractors should be performed

Clifton Gunderson recommended that DOT management update policies and procedures to include specific procedures for timely monitoring and liquidating inactive obligations. The qualifier timely should be clarified in the guidance to ensure consistent implementation of the requirements

Clifton Gunderson recommended that DOT management work with FHWA management to revise its inactive grant procedures and inactive project reports to also identify projects in which no expenditures have been reported since the grants were awarded after 1 year of inactivity. Justification as to why a project is still valid should be reviewed for its reasonableness and documented.

Clifton Gunderson recommended that DOT management Work with FHWA and FTA management to report the status of inactive earmarked grants in their budget justifications that are prepared annually and sent to the Office of the Secretary of Transportation (OST). OST should consider incorporating this information in its budget formulation reports

Clifton Gunderson recommended that DOT management collaborate with FHWA and FTA management to perform their due diligence to ensure that grantees are ready to proceed on a project prior to award. FTA management should also follow up on those grants that have no disbursements after 1 year to identify grants that have stalled and are not proceeding

Clifton Gunderson recommended that DOT management ensure FRA and/or FMCSA implement GrantSolutions capabilities and functionalities that include integration with the DOT Delphi accounting system or other planned disbursement system such as iSupplier. In addition, management should update the system functionality to include grantee financial and progress reporting submissions directly into GrantSolutions

Clifton Gunderson recommended that DOT management ensure FRA and/or FMCSA record all active grants in GrantSolutions. This includes grants awarded to Amtrak and any open prior year grants

Clifton Gunderson recommended that DOT management ensure FRA and/or FMCSA identify, assess, and evaluate specific programmatic/operational and financial risk within their grants management processes, including the implementation of a grantee risk assessment process to be performed annually to determine whether additional oversight efforts are necessary to mitigate grantee risks that could result in questioned costs. Management should subsequently implement control activities to address such risks. These control activities should include the development of a grant manual that incorporates the operational, programmatic, and financial management requirements, as well as management review of the applicable SSAE 16 report and consideration of the SSAE 16 report results

Clifton Gunderson recommended that DOT management direct MARAD to continue to implement and monitor the implementation of the recommendations made by GAO in the aforementioned GAO report

Clifton Gunderson recommended that DOT management direct MARAD to promptly report the ADA violation to DOT/OST management

Clifton Gunderson recommended that DOT management direct MARAD to complete its process to reimburse midshipmen for overcharged fees

Clifton Gunderson recommends that DOT management direct FMCSA to revise its grant management manual so that the agency has a consistent, standardized, documented and well-reconciled process for grants awards the recommendations include enhancing documentation of FMCSA's state billing process reviews and requiring division offices to reconcile GrantSolutions to Delphi on a monthly basis and to resolve any differences within 60 days in order to maintain an accurate fund status for grants.

Clifton Gunderson recommends that DOT management direct FMCSA to ensure sufficient and prompt legal counsel involvement when program funds are first appropriated, and ensure legal counsel's review of FMCSA's policies regarding grant programs before disseminating information to the states.

Clifton Gunderson recommends that DOT management direct FMCSA to complete development and implementation of the new training structure for CVISN staff referenced in the GAO report so that the staff has adequate training to manage the program.

Clifton Gunderson recommended that DOT management direct FHWA to promptly complete its analysis to determine if ADA violations occurred and immediately report any violation to DOT/OST management

Clifton Gunderson recommended that DOT management direct FHWA to evaluate the cause for the over-obligation and establish a comprehensive internal control system for monitoring funds on a real-time basis when an obligation is made. In addition, a reporting tool to monitor the overall fund status should be used so FHWA's budget, program and financial management personnel can monitor the actual spending at the Treasury fund symbol, allotment, fund, BPAC and grant level on a monthly basis

Clifton Gunderson recommended that DOT management promptly determine if ADA violations have occurred within FHWA and immediately report any violations to the President and the Congress, as required by law

Clifton Gunderson recommended that DOT management transmit its reports on MARAD's and FMCSA's ADA violations to the President and Congress as soon as possible

Clifton Gunderson recommends that DOT management incorporate the internal review of OA's fund control monitoring and grant reconciliation processes into DOT's A-123, Appendix A implementation efforts.

Clifton Gunderson recommended that DOT management direct the Chief Information Officer to enhance its annual FISMA reporting process to provide sufficient and timely information on its assessment of the adequacy of its information security program and any significant deficiencies identified. This process should provide sufficient documentation for the auditor to determine that the assessment was made, how the conclusions were reached, and how the results were captured in the annual assurance statement

Clifton Gunderson recommended that DOT management finalize the department's draft internal control program policy