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March 26, 2019

Quality Control Review of the Management Letter for the Federal Aviation Administration’s Audited Consolidated Financial Statements for Fiscal Years 2018 and 2017

Required by the Chief Financial Officers Act of 1990
Project ID: 
QC2019025
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What We Looked At
This report presents the results of our quality control review (QCR) of KPMG LLP’s management letter related to the audit it conducted, under contract with us, of the Federal Aviation Administration’s (FAA) consolidated financial statements for fiscal years 2018 and 2017. In addition to its audit report on FAA’s financial statements, KPMG issued a management letter that discusses four internal control matters that it was not required to include in its audit report.
 
What We Found
Our QCR of KPMG’s management letter disclosed no instances in which KPMG did not comply, in all material respects, with generally accepted Government auditing standards.
 
Recommendations
KPMG made four recommendations in its management letter. FAA concurred with all four recommendations.

Recommendations

Open

Closed

Closed on 02.21.2020
No. 1 to FAA

KPMG recommends that FAA perform a review of the accounts payable accrual, including the procurement samples selected and their fiscal year allocation, at a level of precision to identify errors in order to prevent a potential misstatement.

Closed on 03.17.2020
No. 2 to FAA

KPMG recommends that FAA develop and implement policies and procedures to ensure that all assets that meet the criteria for the EC&D liability are included in the facility quantities report and that any converted assets are properly removed and re-included in the report under the new facility contraction.

Closed on 03.02.2020
No. 3 to FAA

KPMG recommends that FAA develop and implement policies and procedures to ensure that all assets are recorded with the appropriate useful life based on the asset dictionary.

Closed on 03.02.2020
No. 4 to FAA

KPMG recommends that FAA develop and implement policies and procedures to ensure accurate accounting for internal use software assets in accordance with SFFAS 10.