Federal Reports

KPMG’s audit of DOI’s FY 2025 financial statements found 1 material weakness and 2 significant deficiencies in financial reporting internal controls.

Our Objective(s)To perform a quality control review (QCR) of KPMG LLP's audit of the Department of Transportation's consolidated financial statements as of and for the fiscal year ended September 30, 2025. We reviewed KPMG's report, dated January 14, 2026, and related documentation.
About This ReportWe contracted with the independent public accounting firm KPMG to audit DOT's consolidated 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, KPMG, found one significant deficiency in DOT's IT internal controls over financial reporting:

Weaknesses in General Information Technology Controls.

Our QCR disclosed no instances in which KPMG did not comply, in all material respects, with U.S. generally accepted Government auditing standards.
RecommendationsWe agree with KPMG's three recommendations to help strengthen DOT's General Information Technology Controls.

Our Objective(s)To perform a quality control review (QCR) of KPMG, LLP's audit of the Federal Aviation Administration's (FAA) financial statements as of and for the fiscal year ended September 30, 2025. We reviewed KPMG's report, dated January 13, 2026, and related documentation.
About This ReportWe contracted with the independent public accounting firm KPMG, LLP to audit FAA'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, KPMG, found two significant deficiencies in FAA's internal controls over financial reporting:

Weakness in the non-letter of intent grant accrual estimate methodology, and
Weakness in the accounting for Category C (future fiscal years) apportionments.

Our QCR disclosed no instances in which KPMG did not comply, in all material respects, with U.S. generally accepted Government auditing standards.
RecommendationsWe agree with KPMG's four recommendations to help strengthen FAA's internal controls.

The VA Office of Inspector General (OIG) conducted a healthcare inspection at the Syracuse VA Medical Center (facility) to assess allegations of reduced clinical services, poor leadership communication, and staff resignations. The OIG also identified concerns about patient transfer delays and oversight of infrastructure requirements.

The OIG substantiated that clinical services were reduced. The former Facility Director closed the neurosurgery program without submitting a required clinical restructuring request, bypassing national oversight. Facility leaders allowed contracts for infectious disease and endocrinology services to lapse and did not implement contingency plans upon the lapses. The OIG also substantiated eight physicians resigned due to clinical service reductions and deficient communication. Further, coverage requirements of the facility’s complexity designation were not met, which reduced the availability of clinical services. Although the OIG did not identify any adverse patient outcomes, the OIG is concerned about the potential risk.

Facility leaders did not have a process to monitor patient transfer timeliness; therefore, the OIG was unable to determine if delays occurred. Veterans Integrated Service Network and facility leaders also did not provide compulsory oversight of facility infrastructure requirements, increasing risks to patient care. 

In response to the OIG’s recommendations, the Acting Under Secretary for Health outlined plans for communicating expectations for infrastructure deficiency waivers. The Interim Veterans Integrated Service Network Director committed to evaluating circumstances that led to facility leaders not following clinical restructuring requirements as well as ensuring accurate infrastructure reviews. The Interim Facility Director also reported plans to verify accurate infrastructure reviews, enhance communication strategies, and examine contracting and patient transfer processes.