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Quality Control Review of the Department of Transportation’s Audited Financial Statements for Fiscal Years 2013 and 2012

Project ID: 
QC2014015

On December 16, 2013, we issued an audit report on our quality control review (QCR) of the Department of Transportation’s consolidated financial statements for fiscal years 2013 and 2012.  KPMG LLP, under contract to the Office of the Inspector General, issued a clean (unmodified) audit opinion on these financial statements. KPMG LLP found three significant deficiencies in internal control over financial reporting. KPMG LLP also found instances of reportable noncompliance with the laws and regulations tested. Our QCR disclosed no instances in which KPMG LLP did not comply, in all material respects, with auditing standards.

Recommendations

Open

Closed

Closed on 01.14.2016
$518,000,000.00
No. 1 to OST

Develop a department-wide requirement for the periodic operating administration certification of the open obligation balance that is inactive for twelve or more months (validity).

Closed on 01.14.2016
No. 2 to OST

Continue to provide department-wide training related to grants management, including the monitoring and close-out process.

Closed on 01.14.2016
No. 3 to OST

Require that FHWA emphasize the timely review and de-obligation of stale obligations in accordance with the revised Financial Integrity Review and Evaluation (FIRE) program.

Closed on 01.14.2016
No. 4 to OST

Require that FTA review their processes for monitoring obligations in order to more timely identify and de-obligate stale obligations.

Closed on 01.14.2016
No. 5 to OST

Develop a report that reflects a complete population of open UCO balances, by agreement number, as of a period-end date.

Closed on 01.14.2016
No. 6 to OST

Implement policies and procedures, whereby the DOT OAs, with material unfilled customer order balances, monitor and review its open UCO balances using the above report for completeness, accuracy, and validity.

Closed on 01.14.2016
No. 7 to OST

Perform a reconciliation of reimbursable expenditures to reimbursable revenue, at the agreement level, to ensure reimbursable revenue is properly recognized in the appropriate accounting period and all material reconciling items are investigated.

Closed on 01.14.2016
No. 8 to OST

Provide training on the execution, monitoring and reporting of UCOs in accordance with the newly established policies and procedures.

Closed on 01.14.2016
No. 9 to OST

Follow the established policies and procedures and finish development of a business intelligence (BI) report to monitor Fund 15X015P633 monthly. In addition, record any necessary year-end accrual and adjusting entries to ensure the full cost recovery program reports a zero balance at year-end.

Closed on 01.14.2016
No. 10 to FTA

Continue with plans to add FMS into the SIEM tool.

Closed on 01.14.2016
No. 11 to FTA

Prior to the implementation of SIEM, we recommend that FTA implement policies and procedures to formally document and track audit logs reviews of FMS, including a date and time stamp with the reviewers' electronic signature.

Closed on 01.14.2016
No. 12 to FTA

Emphasize, through training, the importance of Inspector General Act of 1978, as amended and DOT Order 8000.6B to ensure that all FTA employees understand the provisions of the laws and regulations when responding to Office of Inspector General auditor's inquiries and requests.

Closed on 01.14.2016
No. 13 to FTA

Perform a review of FTA's control environment using one of the various tools (available from the GAO, or organizations such as the Committee of Sponsoring Organizations of the Treadway Commission - COSO) to assess entity level control effectiveness at FTA. Based on the outcome of this review, take steps to improve the control environment of FTA, including establishing management oversight functions that ensure effective internal controls over financial reporting.

Closed on 12.12.2016
No. 14 to OST

Complete the investigation into potential additional Anti-Deficiency Act violations at FRA.

Closed on 12.12.2016
No. 15 to OST

Follow established protocol that has been designed to prevent Anti-Deficiency Act violations.