Audit Reports

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November 4, 2019

Gaps in Internal Controls Impede the Department’s Management of Working Capital Fund Laptops

Self-Initiated
Project ID: 
ZA2020006
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What We Looked At
Laptop computers are an essential and widespread information technology asset at the Department of Transportation (DOT). From fiscal years 2013 to 2017, DOT purchased 5,448 laptops (costing approximately $8.6 million) using the Department’s Working Capital Fund (WCF). Federal regulations and DOT policy require that the Department ensure the appropriate and effective receipt, inspection, acceptance, and accounting for any property once it is delivered. Given the Department’s significant investment in laptop computers and the importance of strong management and oversight, we initiated this audit. Our audit objectives were to: (1) determine whether DOT is following the Office of Management and Budget’s (OMB) requirements for purchases of laptop computers; (2) assess whether DOT's policies and procedures for receipt, inspection, and acceptance of laptops are sufficient; and (3) assess whether internal controls are in place to account for the laptops in DOT’s inventory management system after acceptance.
 
What We Found
While most of DOT’s Operating Administrations complied with OMB requirements for the purchase of laptop computers, we identified weaknesses in DOT’s laptop management procedures following their purchase. In particular, DOT’s current policy defining its process for managing Government equipment is outdated and does not fully address the Department’s operating environment. DOT also lacks sufficient internal controls to account for WCF-purchased laptops after acceptance, including tracking laptops once they are transferred to Operating Administrations or individual users. Based on our findings, we estimated that DOT could not account for 34.3 percent of the 5,448 laptops in the universe, representing $2.9 million in funds that could have been put to better use, as detailed in our report.
 
Our Recommendations
We made eight recommendations to improve the Department’s acquisition and oversight of WCF-funded laptops. OST concurred with recommendations 1, 2, 3, 4, 5, 6, and 7 and partially concurred with recommendation 8. For the partial concurrence, OST agreed to take the recommended action but did not agree with our finding that $2.9 million in funds could be put to better use.

Recommendations

Open

Closed

Closed on 05.15.2020
No. 1 to OST

Update DOT DASH 2016-01 to specifically state that FAA Strategic Sourcing for the Acquisition of Various Equipment & Supplies (SAVES) is not an approved vehicle under Office of Management and Budget (OMB) requirements.

Closed on 05.15.2020
No. 2 to OST

Document the revised IT Spend Plan process to verify OAs meet OMB requirements when procuring laptop computers.

No. 3 to OST

Implement enhanced physical security controls for the Information Technology Shared Services (ITSS) asset room where Working Capital Fund (WCF)-funded laptops are stored.

No. 4 to OST

Develop and implement supplemental guidance that defines responsibilities for the Office of Facilities, Information, and Asset Management (OFIAM) and ITSS with respect to receipt, inspection, and acceptance, and inventory management processes and procedures for WCF-purchased laptops.

No. 5 to OST

Update DOT Order 4410.4 to include: a. Defining roles and responsibilities of DOT offices and personnel with respect to management of WCF laptop computers. b. Requiring hand receipts or a similar form whenever an accountable property asset (e.g., laptop) is assigned or unassigned to/from a user. c. Requiring record retention of records from hand receipts or a similar control with the appropriate property official. d. Establishing a timeframe for submitting Reports of Survey to OFIAM.

No. 6 to OST

Establish a Board of Survey to review instances of lost or damaged WCF equipment as required by DOT Order 4410.4.

No. 7 to OST

Develop and implement a process for verifying the timely and accurate entry of laptop computer data into OFIAM's official personal property system of record, to include establishing data entry timeframes, key fields (e.g., procurement and delivery dates), and quality control checks.

$2,900,000
No. 8 to OST

Develop and implement procedures for conducting the annual property inventory to include obtaining missing hand receipts or similar control and timely resolution of discrepancies for WCF laptops. Implementation of this recommendation could result in $2.9 million in funds put to better use.