Federal Reports

Twenty-one Amtrak machinists and supervisors were coached and counseled between October 31, 2019 and February 16, 2020, after our investigation determined the employees received temporary pay increases they were not entitled to. Known as “pay differentials,” these temporary hourly pay increases are granted for work performed beyond an employee’s regular duties. We found that employees based in Chicago, Los Angeles, and Washington, DC, were ineligible to receive the pay differentials, yet they requested these payments from the company’s Work Management System and their supervisors approved them without proper verification. We found that the company paid approximately $43,000 in pay differentials that it was not contractually obligated to pay under its collective bargaining agreement. Company officials said they implemented an updated pay differential policy that will prevent such future payments unless they are explicitly approved by management.

In accordance with the Chief Financial Officers Act of 1990, as amended, we are required to annually audit the consolidated financial statements of the U.S. Department of Housing and Urban Development (HUD) and the stand-alone financial statements of the Federal Housing Administration and the Government National Mortgage Association (Ginnie Mae). Our objective was to express an opinion on the fair presentation of HUD’s consolidated financial statements in accordance with U.S. generally accepted accounting principles applicable to the Federal Government. This report presents our independent auditor’s report on HUD’s fiscal year 2019 consolidated financial statements and reports on internal controls and compliance with laws, regulations, contracts, and grant agreements. We expressed a qualified opinion on HUD’s fiscal year 2019 consolidated financial statements because of the significant effects of certain unresolved audit matters, which restricted our ability to obtain sufficient, appropriate evidence about HUD’s other noncredit reform loans and other liabilities resulting from Ginnie Mae’s guaranty asset and guaranty liability. This report contains one material weakness, three significant deficiencies, and three instances of noncompliance with applicable laws, regulations, contracts, and grant agreements. Additional details on the material weakness, significant deficiencies, and instances of noncompliance with laws, regulations, contracts, grant agreements, and related recommendations are included in separate audit reports entitled (1) Additional Details To Supplement Our Fiscal Year 2019 U.S. Department of Housing and Urban Development Financial Statements Audit (audit report 2020-FO-0003); (2) Federal Housing Administration Fiscal Years 2019 and 2018 Financial Statements Audit (audit report 2020-FO-0001); and (3) Audit of the Government National Mortgage Association Fiscal Year 2019 Financial Statements (audit report 2020-FO-0002). We make no recommendations in this report because it is supplemented by three separate reports as described above to provide specific recommendations to HUD management.

Due to the importance of having critical spare parts available to reduce the amount of recovery time after events that may affect the transmission system, we conducted an evaluation to determine if Transmission is effectively managing critical spare parts. Transmission manages its critical spare parts as storm restoration material.We determined storm restoration material could be managed more effectively. Specifically, we found (1) discrepancies between storeroom inventory counts and data in TVA’s work management system, (2) storm restoration materials were not properly identified, and (3) storm restoration material reorder points were incorrect. Additionally, Transmission’s Web site contained out-of-date and incomplete data.

Under a contract monitored by the NCUA OIG, KPMG, an independent certified public accounting firm, performed an audit of NCUA’s financial statements as of December 31, 2019. The contract required that the audit be performed in accordance with generally accepted government auditing standards issued by the Comptroller General of the United States, Office of Management and Budget audit guidance, and the Government Accountability Office/President's Council on Integrity and Efficiency Financial Audit Manual. KPMG’s audit report for 2019 includes: (1) an opinion on the financial statements, (2) conclusions on internal control over financial reporting, and (3) a section addressing compliance and other matters.