Federal Reports

The auditors expressed the opinion that the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the United States Department of Education as of September 30, 2018, and its net cost, changes in net position, and budgetary resources for the year then ended in accordance with U.S. generally accepted accounting principles. The auditors considered the deficiencies described in Exhibit A, Controls over the Reliability of Information Used in the Modeling Activities Need Improvement, to be a material weakness. The auditors considered the deficiencies described in Exhibit B, Information Technology Controls Need Improvement, to be a significant deficiency. The auditors also reported that the results of testing disclosed an instance of non-compliance that was described in Exhibit C, Requirement for Referring Delinquent Student Loan Debts to Treasury.

The auditors expressed the opinion that the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Federal Student Aid as of September 30, 2018, and its net cost, changes in net position, and budgetary resources for the year then ended in accordance with U.S. generally accepted accounting principles. The auditors considered the deficiencies described in Exhibit A, Controls over the Reliability of Information Used in the Modeling Activities Need Improvement, to be a material weakness. The auditors considered the deficiencies described in Exhibit B, Information Technology Controls Need Improvement, to be a significant deficiency. The auditors also reported that the results of testing disclosed an instance of non-compliance that was described in Exhibit C, Requirement for Referring Delinquent Student Loan Debts to Treasury.

The CSB received an unmodified opinion on its fiscal years 2018 and 2017 financial statements.

OIG audited USDA’s consolidated financial statements for fiscal year 2018.

This report presents the results of the audit of Natural Resources Conservation Service’s (NRCS)balance sheet as of September 30, 2018. The report contains an unmodified opinion on thebalance sheet, as well as an assessment of NRCS’ internal controls over financial reporting andcompliance with laws and regulations.KPMG LLP, an independent certified public accounting firm, conducted the audit. In connectionwith the contract, we reviewed KPMG LLP’s report and related documentation and inquired ofits representatives

This year marks the 40th anniversary of the Inspector General Act and the creation of the original 12 Offices of Inspector General. Our office was established in 1989 as a result of 1988 amendments to the Act. Since that time, the community has grown to include 73 statutory Inspectors General who collectively oversee the operations of nearly all aspects of federally funded operations. Every six months, we are required by the Act to provide Congress a report detailing our independent oversight of Amtrak. This report—the 58th in our history—highlights our activities for the six months ending September 30, 2018.Our activities continued to focus on assessing the efficiency and effectiveness of Amtrak’s programs and operations while investigating allegations of fraud, waste, and abuse. Most recently, we reported our views of the top management and performance challenges facing Amtrak for fiscal years 2019 and 2020. We concluded that the company made progress across each of the challenge areas. In particular, the company reduced operating costs to the lowest amount in the past five fiscal years, and it institutionalized more effective management processes and tools. However, the company continues to face several longstanding challenges. Chief among them is improving its safety record, as employee and passenger fatalities increased to their highest levels since fiscal year 2015.Among other issues, our investigative work led to a $650,000 settlement from an alleged False Claims Act violation involving an Amtrak contractor. We also participated in multiple investigations of health care fraud that resulted in arrests and convictions in Florida and California. Additionally, we investigated a significant breach of the company’s ethics policy that involved collusion between an Amtrak employee and officials of a contractor on maintenance contracts worth $7.6 million.In the months ahead, we will continue to focus on high-risk areas of the company’s programs and operations and will unwaveringly pursue our vision of operating as a model OIG by developing objective products that provide value to company management, the Board of Directors, Congress, and the public. We also continue working with the 73 statutory Inspectors General that constitute the Council of Inspectors General on Integrity and Efficiency. We trust that you will find this report informative.