November 8, 2017
Required by the Government Corporation Control Act of 1945
Report on the Audited Financial Statements for Fiscal Year 2017 - Saint Lawrence Seaway Development Corporation
What We Looked At
In accordance with the Government Corporation Control Act of 1945, we have audited the financial statements of the Saint Lawrence Seaway Development Corporation (SLSDC), a U.S. Government Corporation, comprising SLSDC’s statement of financial position as of September 30, 2017; statements of operations and changes in cumulative results of operations, cash flows, budgetary resources and actual expenses, and changes in equity of the U.S. Government for the year then ended; and the related notes to the financial statements. SLSDC’s financial statements for the year ended September 30, 2016, were audited by other auditors who expressed an unmodified opinion on those financial statements in their report dated October 14, 2016.
What We Found
Regarding controls over financial reporting of FECA actuarial liabilities—In its draft fiscal year 2017 and prior financial statements, SLSDC presented Worker’s Compensation Benefits as an asset but did not record them in its accounting records or have support for the asset. SLSDC acknowledged this presentation error, corrected the presentation for fiscal year 2017, and restated the fiscal year 2016 financial statements to remove it.
Regarding controls over reporting financial activities for the Seaway International Bridge—SLSDC did not record revenues from bridge operations or expenses associated with service job orders in its accounts throughout the fiscal year. Furthermore, evidence of past transactions resulting in current obligations did not support the liability for bridge repairs as of October 1, 2016. SLSDC had to restate its fiscal year 2016 financial statements to recognize and present surplus allocations, interest, and gains/losses totaling $225,030, and bridge repair expenses totaling $245,093.
Regarding controls over property, plant and equipment (PP&E)—In a statistically selected sample of 73 PP&E assets, we found that depreciation for numerous assets was not recorded correctly due to conversion to a new financial management system. For example, two assets were depreciated using incorrect depreciation schedules and five were depreciated using incorrect or inappropriate useful lives.
A potential violation of 31 U.S.C. § 9107(b)—SLSDC allowed the Seaway International Bridge Corporation (SIBC), a Canadian corporation to hold $3,171,712 on its behalf in foreign bank and investment accounts. Without a waiver from the Secretary of Treasury, this could be a violation of 31 U.S.C. § 9107(b).
We made 11 recommendations to help SLSDC improve its financial management practices and controls. SLSDC concurred with all of our recommendations.