Quality Control Review of the Management Letter for the Surface Transportation Board's Audited Financial Statements for Fiscal Year 2025

Date Issued

Wednesday, February 25, 2026

Submitting OIG

Department of Transportation OIG

Agencies Reviewed/Investigated

Surface Transportation Board

Report Number

QC2026018

Report Description

Our Objective(s)To perform a quality control review (QCR) of Allmond & Company, LLC's management letter related to the audit of the Surface Transportation Board's (STB) financial statements for the fiscal year ended September 30, 2025. We reviewed Allmond's management letter, dated January 7, 2026, and related documentation.
About This ReportWe contracted with the independent public accounting firm Allmond to audit STB's financial statements. Almond also issued a management letter discussing internal control matters that Allmond was not required to include in its audit report.
What We FoundThe independent auditor, Allmond, found nine internal control matters in STB's operations:

Completion of revenue reconciliations was not properly evidenced,
Complementary user entity controls were not properly designed and implemented for the use of service organization systems,
Accounts payable transaction was recorded and paid from an incorrect funding year,
Improvements needed in internal control relating to the processing of personnel actions,
Improvements needed in internal controls relating to annual leave,
Improvements needed in internal control relating to the performance of property inventories,
Lack of sufficient internal control over financial reporting relating to upward and downward adjustments of prior year obligations,
Leave carryover balances were not properly calculated or reviewed, and
Federal Employees Health Benefits Program premiums were included in Old-Age, Survivors, and Disability Insurance and Medicare taxes in error.

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 17 recommendations to help strengthen STB's internal controls.

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/47154

Open Recommendations

This report has 17 open recommendations.

Recommendation Number	Significant Recommendation	Recommended Questioned Costs	Recommended Funds for Better Use
1	Yes	$0	$0
Ensure that documentation that evidences the performance of revenue reconciliations is complete and accurate.
2	Yes	$0	$0
Update policies and procedures to specify how the completion of the reconciliation process is evidenced.
3	Yes	$0	$0
Develop specific procedures to ensure that program managers, Contracting Officer's Representatives, and/or Human Resources personnel notify the Access Control Officers for service organization systems used by the agency when an employee or contractor separates from the agency or no longer needs access.
4	Yes	$0	$0
Implement and document a second-level review of the accounting information assigned to vendor-initiated payments to ensure that payments are assigned to the correct contracts and option years and that payments are assigned to the correct Treasury Account Symbol.
5	Yes	$0	$0
Create and enforce agency-specific written policies and procedures that specify how personnel actions should be initiated, reviewed, and submitted. These policies and procedures should specify the roles and responsibilities of Human Resources personnel relating to this process and the required elements and documentation of management's review of personnel actions prior to submission.
6	Yes	$0	$0
Perform and document routine reviews on a monthly or more frequent basis to ensure that all personnel actions processed during the period were appropriately reviewed and approved by a second, authorized Human Resources official and the information reported on the Standard Form 50 is accurate in all respects.
7	Yes	$0	$0
Enforce existing policies and procedures requiring all employees to submit a leave request for all annual leave used.
8	Yes	$0	$0
Require timekeepers or other appropriate personnel to verify that all employee leave requests have been submitted and properly approved by the certifying officials and that all leave hours taken agree with the leave type that was requested and approved.
9	Yes	$0	$0
Revise policies and procedures to ensure that supervisors are reviewing employee timesheets at a level of precision that ensures that leave requests have been submitted and approved for all leave hours taken.
10	Yes	$0	$0
Perform its annual physical inventory at a higher level of precision, including identifying and following up on items that have been reported as lost or stolen or for which the stated location is not accurate.
11	Yes	$0	$0
Correct and then regularly update all listings of STB's assets to enable the agency to quickly and accurately locate all items issued to STB personnel.
12	Yes	$0	$0
Work with the service provider to identify, at least quarterly, upward adjustments that have been offset by downward adjustments in the general ledger or perform an independent review of the general ledger activity of both accounts so that manual adjustments can be recorded to properly state the ending balances of both accounts, if needed.
13	Yes	$0	$0
Design and implement policies and procedures which enhance the internal review process for upward and downward adjustment transactions and include a reconciliation of the undelivered orders balances with the supporting documentation to ensure that transactions have been recorded correctly.
14	Yes	$0	$0
Perform a review of all employees' leave balances to ensure they are accurate and comply with 5 U.S. Code 6304 requirements.
15	Yes	$0	$0
Enforce standard operating procedures to require a second Human Resources Specialist or the Human Resources Director to review all employee transfer and onboarding documents to ensure that the documentation is complete and agrees with the information that was entered into the payroll and personnel system before the information is submitted to the payroll service provider.
16	Yes	$0	$0
Perform and document STB's assessment of the recoverability of excess taxes that were paid in error by the agency in matching Old-Age, Survivors, and Disability Insurance and Medicare contributions and the conclusion that was reached.
17	Yes	$0	$0
Research the impacted employee's payroll records to confirm the error and determine why the error occurred. Appropriate action should then be taken to identify any other affected employees and to correct the root cause of the error.