Federal Reports

What We Looked AtThis 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 2020 and 2019. In addition to its audit report on FAA's financial statements, KPMG issued a management letter that discusses 17 internal control matters that it was not required to include in its audit report.What We FoundOur 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.RecommendationsKPMG made 20 recommendations in its management letter. FAA concurred with all 20 recommendations.

What We Looked AtThis 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 Department of Transportation’s (DOT) consolidated financial statements for fiscal years 2020 and 2019. In addition to its audit report on DOT’s financial statements, KPMG issued a management letter that discusses 12 internal control matters that it was not required to include in its audit report. What We FoundOur 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. RecommendationsKPMG made 14 recommendations in its management letter. DOT concurred with all 14 recommendations.

The Patient Protection and Affordable Care Act gave States the option to expand Medicaid coverage to low-income adults without dependent children. It also mandated changes to Medicaid eligibility rules and established a higher Federal reimbursement rate for services provided to these beneficiaries, which led us to audit whether States were correctly determining eligibility for these newly eligible beneficiaries. States operate and fund Medicaid in partnership with the Federal Government through the Centers for Medicare & Medicaid Services. Louisiana was one of 36 States, along with the District of Columbia, that chose to expand Medicaid coverage.

Evaluated NASA’s efforts to mitigate the risks posed by orbital debris as well as the Agency’s coordination and communication efforts with international and commercial organizations to address the issue.

The Office of Inspector General evaluated NASA’s efforts to mitigate the risks posed by orbital debris—human-made objects in space no longer serving a useful purpose—as well as the Agency’s coordination with international and commercial organizations to address the issue.

The VA Office of Inspector General (OIG) assessed the merits of an August 2019 hotline allegation that a deceased veteran’s VA funds had been misused while he was living at a California nursing home. As part of its assessment, which is the subject of an upcoming report, the OIG discovered the Veterans Benefits Administration (VBA) had not finalized the veteran’s incompetency proposal. VBA staff had received medical evidence that he was incapable of managing his VA benefits payments and had prepared an incompetency proposal, which when finalized results in VA appointing a fiduciary to manage the beneficiary’s funds. However, the proposal had been initiated three years before his death but not completed. This delay conflicts with VBA guidance that the decision be made and a fiduciary—a person or legal entity charged with managing the incompetent beneficiary’s estate—appointed within 141 days.The OIG expanded its review and found VBA had not finalized incompetency proposals for 221 beneficiaries from January 1, 2016, through December 31, 2019. Of the 221 beneficiaries, the OIG statistically selected 55 records and determined that all were without incompetency decisions. Generally, the incomplete decisions occurred because staff did not update the workload management tool to show an incompetency proposal was pending a decision. Without that update, the case does not appear in the inventory of incompetency proposals requiring final action, no decision is made or fiduciary appointed, and vulnerable beneficiaries’ funds could be mismanaged. VBA agreed 52 of the 55 were incomplete (stalled); the others were on appeal or had been flagged for a decision. This management advisory memo provides VBA with the remaining 166 of the 221 records found to have incomplete decisions so that VBA can determine whether further action is needed to ensure incompetency proposals are finalized.