Independent Auditors’ Report on the U.S. Department of the Interior’s Financial Statements for Fiscal Years 2023 and 2022

Submitting OIG:

Department of the Interior OIG

Report Description:

KPMG audited DOI’s financial statements and found three material weaknesses and one significant deficiency in financial reporting internal controls.

Short / Alternative Report Title:

Independent Auditors’ Report on the DOI’s Financial Statements for FYs 2023 and 2022

Date Issued:

Friday, December 8, 2023

Agency Reviewed / Investigated:

Department of the Interior

Submitting OIG-Specific Report Number:

2023-FIN-021

Component, if applicable:

Departmentwide

Location(s):

Agency-Wide

Type of Report:

Audit

Questioned Costs:

Funds for Better Use:

Number of Recommendations:

Report updated under NDAA 5274:

View Document:

Attachment	Size
Final-Audit-ReportDOI-Financial-Statement-Audit.pdf	2.95 MB

Recommendation Number	Recommendation Status	Significant Recommendation
2023-FIN-021-A.PFM.001.1	Open	Yes
We recommend that the Department strengthen process controls over the preparation, compilation, and review of its financial statement and related disclosures to include a thorough review of the annual OMB Circular No. A-136 Financial Reporting Requirements and the templates used in the process of generating the financial statements and the related disclosures.
2023-FIN-021-B.PFM.002.1	Open	No
We recommend that management across the Department strengthen the process for reviewing and evaluating existing accounting policies and guidance, specifically the guidance over unique transactions related to natural disaster events, to ensure the established Department policies clearly comply with GAAP.
2023-FIN-021-B.PFM.002.2	Open	No
We recommend that management across the Department provide comprehensive training programs for employees for reviewing and evaluating accounting transactions for compliance with GAAP, specifically the relevant FASAB SFFAS.
2023-FIN-021-B.PFM.002.3	Open	No
We recommend that management across the Department evaluate the remaining Natural Disaster Liability balance against the relevant SFFAS 5 criteria and determine the accurate amount to report as a liability of the Department.
2023-FIN-021-C.PFM.004.1	Open	Yes
We recommend that management across the Department develop and implement policy and standardized procedures in conjunction with the Asset Management Council for tracking fixed asset projects constructed by other Federal agencies.
2023-FIN-021-C.PFM.004.2	Open	Yes
We recommend that management across the Department establish strong communication channels with external Federal agencies involved in constructing assets on the Department's behalf. This should include establishing formal agreements, regular meetings, and periodic reconciliations to ensure all fixed asset transactions are captured and recorded timely and accurately.
2023-FIN-021-C.PFM.004.3	Open	Yes
We recommend that management across the Department put in place monitoring controls to regularly review and reconcile fixed asset transactions constructed by other Federal agencies within the financial records. This can involve periodic reviews of project documentation, invoices, and payment records to ensure completeness and accuracy.
2023-FIN-021-C.PFM.004.4	Open	No
We recommend that management across the Department conduct training sessions for relevant personnel involved in financial record-keeping to enhance their understanding of the importance of tracking construction projects performed by other Federal agencies. This will help ensure compliance with established procedures and controls.
2023-FIN-021-D.PFM.005.1	Open	No
We recommend that both programmatic and financial management across the Department enhance monitoring capabilities related to existing deficiencies to address existing design deficiencies and improve operating effectiveness of the related controls in a timely manner. Specifically, management should consider a baseline (current year) assessment and compare against management’s design (future state) of the internal control system to address the objectives and risks of the Department.

Recommendation Number

Recommendation Status

Significant Recommendation

Additional Details

2023-FIN-021-A.PFM.001.1

Open

Yes

We recommend that the Department strengthen process controls over the preparation, compilation, and review of its financial statement and related disclosures to include a thorough review of the annual OMB Circular No. A-136 Financial Reporting Requirements and the templates used in the process of generating the financial statements and the related disclosures.

2023-FIN-021-B.PFM.002.1

Open

We recommend that management across the Department strengthen the process for reviewing and evaluating existing accounting policies and guidance, specifically the guidance over unique transactions related to natural disaster events, to ensure the established Department policies clearly comply with GAAP.

2023-FIN-021-B.PFM.002.2