Federal Reports

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 years ended September 30, 2024, and September 30, 2023. We reviewed KPMG's report, dated November 12, 2024, and related documentation.
About This ReportWe contracted with the independent public accounting firm KPMG LLP 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.

KPMG found general information technology control deficiencies within various systems at the Federal Highway Administration and the Federal Aviation Administration.

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.

We rendered an unmodified opinion on the EPA's consolidated financial statements for fiscal years 2024 and 2023 (restated), meaning that they were fairly presented and free of material misstatement. However, we noted three material weaknesses and one significant deficiency. The most concerning material weakness the OIG identified is that the EPA used an existing rebate transaction type that was established to record the Clean School Bus rebate payments. This resulted in $828 million of rebate payments being recorded as expenses instead of advances

Allmond & Company rendered an unmodified opinion on the CSB's fiscal years 2024 and 2023 financial statements, meaning that the statements were fairly presented and free of material misstatements.

The U.S. Small Business Administration (SBA) Office of Inspector General (OIG) contracted with the independent certified public accounting firm KPMG LLP to conduct an audit of SBA’s consolidated balance sheets as of September 30, 2024 and 2023 and the related notes to these statements. Our contract with KPMG required that the audit be performed in accordance with auditing standards generally accepted in the United States of America, Government Auditing Standards issued by the Comptroller General of the United States, and Office of Management and Budget (OMB) Bulletin No. 24-02, Audit Requirements for Federal Financial Statements.

In the audit, KPMG reported significant matters for which they were unable to obtain sufficient and appropriate audit evidence to provide a basis for an audit opinion on SBA’s balance sheet as of September 30, 2024. Accordingly, KPMG issued a disclaimer of opinion on the consolidated balance sheets as of September 30, 2024 and 2023.

The basis for the disclaimer was that due to inadequate processes and controls, SBA was unable to provide adequate evidential matter in support of a significant number of transactions and account balances related to the Paycheck Protection Program, Economic Injury Disaster Loan program, Restaurant Revitalization Fund, and the Shuttered Venue Operators Grant program.

As a result, KPMG was unable to determine whether any adjustments might have been necessary with respect to the following:

• Credit program receivables and related foreclosed property,
• Other than intragovernmental accounts receivable,
• Downward re-estimate payable to Treasury, and
• Loan Guarantee Liabilities and the related notes.

For the period that ended September 30, 2024, KPMG identified seven material weaknesses and two significant deficiencies in internal control over financial reporting. Appendixes I and II of this report describe details of KPMG’s conclusions about the material weaknesses and significant deficiencies. Appendix III describes instances of noncompliance with applicable laws or other matters required to be reported under Government Auditing Standards or OMB Bulletin No. 24-02.

We provided a draft of the KPMG report to SBA’s Chief Financial Officer, who concurred with its findings and recommendations and agreed to implement the recommendations. The Chief Financial Officer stated that SBA has undergone tremendous effort to strengthen internal controls, policies, and procedures and will continue remediation efforts in the coming audit year.

We engaged an independent public accounting (IPA) firm to audit DIA’s Fiscal Year (FY) 2024 financial statements. We evaluated the reliability of data supporting the financial statements, determined the reasonableness of the statements produced, and examined disclosures in accordance with applicable guidance. We issued the results of our evaluation in a final report dated November 15, 2024.

We contracted with the independent public accounting firm of Sikich CPA LLC to audit the financial statements of HUD as of and for the fiscal years ending September 30, 2024 and 2023, and to provide reports on HUD’s (1) internal control over financial reporting and (2) compliance with laws, regulations, contracts, and grant agreements and other matters, including whether financial management systems complied substantially with the requirements of the Federal Financial Management Improvement Act of 1996 (FFMIA).  Our contract with Sikich required that the audit be performed in accordance with U.S. generally accepted government auditing standards, Office of Management and Budget audit requirements, and the Financial Audit Manual of the U.S. Government Accountability Office and the Council of the Inspectors General on Integrity and Efficiency.

In its audit of HUD, Sikich reported

That HUD’s financial statements as of and for the fiscal year ending September 30, 2024, were presented fairly, in all material respects, in accordance with U.S. generally accepted accounting principles.
No material weaknesses for fiscal year 2024 in internal control over financial reporting, based on limited procedures performed.
One significant deficiency for fiscal year 2024 in internal control over financial reporting, based on the limited procedures performed.  The significant deficiency was related to HUD’s financial reporting controls over grant accruals.  
No reportable noncompliance issues for fiscal year 2024 with provisions of applicable laws, regulations, contracts, and grant agreements or other matters.
In connection with the contract, we reviewed Sikich’s reports and related documentation and questioned its representatives.  Our review, as differentiated from an audit of the financial statements in accordance with U.S. generally accepted government auditing standards, was not intended to enable us to express and we do not express opinions on HUD’s financial statements or conclusions about (1) the effectiveness of HUD’s internal control over financial reporting; (2) HUD’s compliance with laws, regulations, contracts,  and grant agreements or other matters; or (3) whether HUD’s financial management systems complied substantially with the three FFMIA requirements.  Sikich is responsible for the attached Independent Auditors’ Report, dated November 15, 2024, and the conclusions expressed therein.  Our review disclosed no instances in which Sikich did not comply, in all material respects, with U.S. generally accepted government auditing standards.

HUD’s financial statements are included in HUD’s Agency Financial Report which can be found at afr2024.pdf.