Federal Reports

This report includes EAC OIG’s independent assessment of the top management challenges facing the EAC in fiscal year 2026.

The audit objectives were to determine whether program funds were managed in accordance with the ARC and Federal grant requirements.

Transmittal of the Final Report Assessing the Federal Trade Commission’s Compliance with the Federal Information Security Management Act for Fiscal Year 2025 (Redacted for public release)

Amtrak (the company) contracted with the independent certified public accounting firm of Ernst & Young LLP to audit its consolidated financial statements as of September 30, 2025, and for the year then ended, and to provide a report on internal control over financial reporting and on compliance and other matters. Because the company receives federal assistance, it must obtain an audit performed in accordance with generally accepted government auditing standards.

As required by the Inspector General Act of 1978, as amended, we monitored the audit activities of Ernst & Young to help ensure audit quality and compliance with auditing standards. Our monitoring focused on two Ernst & Young reports and disclosed no instances in which Ernst & Young did not comply, in all material respects, with generally accepted government auditing standards. We reached this conclusion by monitoring Ernst & Young’s audit activities, which included reviewing its reports, auditor independence and qualifications, audit plans, detailed testing results, summary work papers, and quality controls. We also attended key meetings.

Ernst & Young’s first report was its audit of the company’s consolidated financial statements for fiscal year (FY) 2025. In a report dated December 12, 2025, Ernst & Young concluded that the company’s consolidated financial statements were presented fairly, in all material respects, in accordance with U.S. generally accepted accounting principles. Further, the report emphasized that the company has a history of operating losses and without receipt of federal government funding, the company will not be able to continue in its current form, and significant operating changes, restructurings, or bankruptcy might occur.

In its second report on the company’s internal control and compliance, Ernst & Young did not identify any deficiencies that it considered to be significant deficiencies or material weaknesses.

Ernst & Young identified other deficiencies in internal controls over financial reporting that did not rise to the level of a significant deficiency, which it provided in a separate management letter issued to the company on December 12, 2025.

Although our review disclosed no instances in which Ernst & Young did not comply, in all material respects, with generally accepted government auditing standards, we note that our monitoring activities were not intended to enable us to express an audit opinion in accordance with generally accepted government auditing standards. Accordingly, we do not express an opinion on the company’s consolidated financial statements or conclusions about the effectiveness of internal controls and compliance with laws and regulations. As such, Ernst & Young is responsible for its reports and the conclusions expressed in those reports.

This report represents our current assessment of the U.S. Small Business Administration's programs and activities that pose significant risks, including those that are particularly vulnerable to fraud, waste, error, mismanagement, or inefficiencies. The Challenges are not presented in order of priority, as we believe that all are critical management or performance issues.

The report summarizes the activity of the FEC Office of Inspector General from April 1, 2025 through September 30, 2025.

In accordance with the Reports Consolidation Act of 2000, OIG is submitting a statement on what it considers to be the most significant management and performance challenges facing the Peace Corps. At Peace Corps OIG, we base this statement on the following: our audit, evaluation, and investigative work; our knowledge of the Peace Corps’ activities and operations; and the insights of agency senior leaders who provide their perspectives and expertise. For fiscal year (FY) 2026, we identified the following challenge areas:  Volunteer Delivery System; Volunteer Health and Safety; Human Capital Management; and Information Technology Security Management.

Addressing the issues related to these challenge and performance areas will enhance the agency’s operational efficiencies, minimize potential fraud, waste, and abuse, and improve mission effectiveness.

We found that the company has started upgrading its maintenance facilities to support its major fleet acquisitions, but challenges in planning and managing this effort have delayed its progress. As a result, some facilities will not be ready in time to service the company’s new trains, which could hinder its ability to fully operate the new equipment at their intended service levels. Instead, the company may need to store some new trains intermittently, which could postpone the capture of additional revenue. Further facility delays—which remain a risk—would add to the existing delays in fully operating its new fleets.

Two factors contributed to these circumstances. First, the company’s facility planning has significantly lagged behind its fleet planning despite the two efforts being closely interconnected. Second, the company is separately managing dozens of facility projects rather than managing them as a single, coordinated effort, as called for by company and industry standards.

We recommended that the company continue to develop a joint strategic fleet/facilities plan that defines company goals, timelines, and next steps. We also recommended that the company develop a management framework for its facility upgrades, including a risk management process.