Quality Control Review of the Independent Auditor's Report on the Great Lakes St. Lawrence Seaway Development Corporation's Audited Financial Statements for Fiscal Years 2024 and 2023

Date Issued

Wednesday, November 13, 2024

Submitting OIG

Department of Transportation OIG

Agencies Reviewed/Investigated

Department of Transportation

Components

Great Lakes St. Lawrence Seaway Development Corporation

Report Number

QC2025007

Report Description

Our Objective(s)To perform a quality control review (QCR) of Allmond & Company LLC's audit of the Great Lakes St. Lawrence Seaway Development Corporation's (GLS) financial statements as of and for the fiscal years ended September 30, 2024, and September 30, 2023. We reviewed Allmond's report, dated November 6, 2024, and related documentation.
About This ReportWe contracted with the independent public accounting firm Allmond & Company, LLC to audit GLS's financial statements, provide an opinion on those financial statements, report on internal control over financial reporting, and report on compliance with laws and other matters.
What We FoundThe independent auditor, Allmond, found two significant deficiencies in GLS's internal controls over financial reporting.

Internal control relating to the valuation of operating materials and supplies was not properly designed and implemented in order to prevent or detect and correct errors in unit costs that were entered into the inventory tracking system.
Loss contingencies were not reported in accordance with generally accepted accounting principles.

Our QCR disclosed no instances in which Allmond did not comply, in all material respects, with U.S. generally accepted Government auditing standards.
RecommendationsWe agree with Allmond's six recommendations to help strengthen GLS's internal controls over financial reporting.

Report Type

Audit

Agency Wide

Yes

Number of Recommendations

Questioned Costs

Funds for Better Use

Report updated under NDAA 5274

External Link

https://www.oig.dot.gov/library-item/46518

Open Recommendations

This report has 6 open recommendations.

Recommendation Number	Significant Recommendation	Recommended Questioned Costs	Recommended Funds for Better Use
1	Yes	$0	$0
GLS should amend its procedures relating to the annual count and valuation of operating materials and supplies to include verification of unit and total costs. This should include locating or reconstructing source documentation for the total quantity on hand for each item and matching the costs entered in the system to the source documents.
2	Yes	$0	$0
GLS should determine how average costs are calculated within the inventory tracking system. If the average cost in the system for specific inventory items does not represent the average cost of inventory on hand, the average cost in the system should be periodically adjusted when the annual inventory is performed or at year-end.
3	Yes	$0	$0
GLS should continue executing its corrective action plan and complete the review of the unit and total costs of inventory items.
4	Yes	$0	$0
Proactively and independently initiate discussions with Legal Counsel on an at least quarterly basis in order to identify contingent liabilities which should be recognized and/or disclosed in the Corporation's financial statements and footnotes so that appropriate entries can be recorded, and/or notes disclosures prepared, prior to the finalization of the financial statements and footnotes.
5	Yes	$0	$0
Document the actions taken to verify that the information received is complete and whether information is needed from other sources to complete the financial reporting process.
6	Yes	$0	$0
Update the Corporation's standard operating procedures to incorporate timely inquiries of legal counsel during the preparation of the financial statements and footnotes.