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Audit Reports

Date

Quality Control Review of the Management Letter for DOT’s Financial Statements for Fiscal Years 2015 and 2014

Requested By
Required by the Chief Financial Officers Act of 1990
Project ID
QC2016022
File Attachment

This report presents the results of our quality control review of KPMG LLP’s management letter for the audit of the Department’s consolidated financial statements as of and for the years ended September 30, 2015 and September 30, 2014. The audit was required by the Chief Financial Officers Act of 1990. KPMG previously issued a “clean” (unmodified) opinion on these financial statements in its independent audit report. The management letter identified eight additional financial reporting and information technology internal control weaknesses that were not required to be reported in KPMG’s independent audit report. 

Recommendations

Closed on
No. 1 to FTA
KPMG recommends that FTA revise its grant accrual retrospective review procedures to ensure that the retrospective review is performed at the appropriate level of precision using relevant and reliable data inputs (including FFR reporting, UDO balances, and grant disbursements) and any resulting material adjustments are properly made to the grant accrual methodology.
Closed on
No. 2 to FRA
KPMG recommended that FRA revise its grant accrual retrospective review procedures to ensure that the retrospective review is performed at the appropriate level of precision to prevent and/or detect a material misstatement and that all significant variances are researched and documented in order to assess the reasonableness of the grant accrual methodology.
Closed on
No. 3 to FTA
KPMG recommends that FTA revise its policies and procedures for monitoring obligations in order to more timely identify and de-obligate stale obligations.
Closed on $108,687,594
No. 4 to FHWA
KPMG recommends that FHWA continue to emphasize the timely de-obligation of all stale obligations identified through the revised Supplemental Internal Procedures for the Review, Validation, and Testing of Inactive Obligations.
Closed on
No. 5 to OST
KPMG recommends that DOT develop and implement guidance to formally document its assessments and recognition decisions, in accordance with SFFAC No. 5, as it relates to liabilities of exchange transactions, specifically those decisions to depart from GAAP based on materiality.
Closed on
No. 6 to OST
KPMG recommends that the IT Shared Services enhance data center procedures to ensure all access requests and approvals are retained in accordance with applicable DOT policies.
Closed on
No. 7 to OST
KPMG recommends that OST management enhance account review processes and procedures to ensure that privileged service accounts are periodically reviewed for continued appropriateness, based on the principle of least priv ileged.
Closed on
No. 8 to OST
KPMG recommends that DOT management develop and implement policies and procedures, including increasing the level of precision of the quarterly review of Delphi access, to remove application access for separated employees and contractors immediately upon termination or when it is determined that a user's access is no longer required.