Federal Reports

KPMG issued an unmodified (clean) opinion on the financial statements, reporting that they present fairly, in all material respects, DHS’ financial position as of September 30, 2020. However, KPMG identified material weaknesses in internal control in two areas and other significant deficiencies in three areas. Consequently, KPMG issued an adverse opinion on DHS’ internal control over financial reporting. KPMG also reported three instances of noncompliance with laws and regulations. DHS concurred with all of the recommendations.

U.S. Customs and Border Protection (CBP), United States Secret Service, Immigration and Customs Enforcement (ICE), and Transportation Security Administration (TSA) have not fully complied with DHS’ guidelines for implementing the Lautenberg Amendment. To illustrate, CBP and Secret Service did not ensure law enforcement officers completed annual Lautenberg Amendment certifications as required. CBP and ICE also did not use available resources to monitor law enforcement officer arrests and convictions subject to the Lautenberg Amendment. None of the four components provided domestic violence awareness training to law enforcement officers as required by the implementing guidelines. We made three recommendations that will enhance the components’ ability to ensure compliance with DHS’s guidelines for implementing the Lautenberg Amendment. One recommendation is closed and the other two recommendations are resolved and open.

We conducted this limited review to identify the U.S. Department of Housing and Urban Development’s (HUD) Coronavirus Aid, Relief, and Economic Security Act (CARES Act) drawdown levels for the initial round of Emergency Solutions Grants (ESG) funding. In addition, we researched information published by grantees on how they have used and will use their funds. Our objective was to highlight the grantees’ (1) drawdown levels for the initial round of ESG CARES Act funding and (2) published information on how the funds have and will be used. Our review determined that as of July 1, 2020, the ESG CARES Act drawdown levels for the initial round of funding of $1 billion had been minimal. In addition, a majority of grantees in our sample had not elected to waive their citizen participation plans or indicated whether they would use their consultation waiver, and many had not published their planned uses of the funds. We did not make any recommendations to HUD.

This report presents the results of our audit of Ginnie Mae’s fiscal year 2020 financial statements, including our report on Ginnie Mae’s internal control and test of compliance with selected provisions of laws, regulations, and contracts applicable to Ginnie Mae. In fiscal year 2020, we were able to obtain sufficient, appropriate evidence to express an unmodified opinion on the fairness of Ginnie Mae’s financial statements. We also reported one significant deficiency in its Report on Internal Control Over Financial Reporting and no reportable compliance issues in its Report on Compliance With Laws, Regulations, and Contracts. Specifically, we reported that Ginnie Mae had a significant deficiency in the control design of its organizational structure for two key functions, estimation model development and model verification, within its Office of Enterprise Risk. We further reported that this control deficiency potentially prevents an effective challenge to models used to develop significant estimates for financial reporting.

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with U.S. generally accepted accounting principles; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with U.S. generally accepted accounting principles; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

We found the EPA's financial statements to be fairly presented and free of material misstatement.

The CSB received an unmodified opinion on its fiscal years 2020 and 2019 financial statements.

Manufacturer Credits and Payment Reductions for Medical DevicesFederal regulations and guidance specify how hospitals must report the replacement of a beneficiary’s implanted device if a hospital receives a full or partial credit from the manufacturer for a medical device that is covered under warranty or replaced because of a defect or recall. Medicare does not cover items or services for which neither the beneficiary, nor anyone on his or her behalf, has an obligation to pay (Social Security Act (the Act) § 1862(a)(2)). Federal regulations generally require reductions in both IPPS and OPPS payments for the replacement of certain implanted devices if: (1) the device is replaced without cost to the hospital, (2) the hospital receives full credit for the device cost, or (3) the hospital receives a credit equal to 50 percent or more of the device cost (42 CFR §§ 412.89 and 419.45). Cardiac Medical DevicesCommon cardiac medical devices used to treat beneficiaries include defibrillators, pacemakers, and their associated electrical leads. These devices are implanted during either an inpatient or outpatient procedure. Occasionally, devices may require replacement because of defects, recalls, battery depletions, or mechanical complications, which may be covered under the device manufacturer’s warranty. Generally, cardiac medical device manufacturers provide warranties for defects in materials or workmanship that happen at any time during the life of the product. Such defects may result in recalls or premature failures. When a hospital follows a manufacturer’s warranty process for its cardiac medical device, the manufacturer may issue a full or partial credit to the hospital to cover the cost of the failed or recalled device or provide a replacement without charge.