Federal Reports

We determined that FEMA is not meeting its monitoring of Operation Stonegarden grantee responsibilities because it does not have accurate financial data to identify grantees that require additional monitoring. Also, FEMA has included just 4 of 79 Operation Stonegarden awards made during FYs 2011–14 in its financial monitoring reviews required under the Homeland Security Act of 2002, as amended. Additionally, FEMA and U.S. Customs and Border Protection (CBP) have not issued adequate guidance or conducted thorough reviews of proposed Operation Stonegarden spending. As a result, FEMA and CBP approved more than $14.6 million (or 72 percent of the amount audited) in overtime costs and more than $390,500 (or 4 percent of the amount audited) in equipment costs without addressing the risk of supplantation. Moreover, FEMA and CBP have not collected reliable program data or developed measures to demonstrate program performance resulting from the use of more than $531.5 million awarded under Operation Stonegarden since fiscal year 2008. We made seven recommendations, aimed at improving oversight of the Operation Stonegarden Program. FEMA and CBP concurred with six recommendations and non-concurred with one.

The auditors found that the fiscal years 2017 and 2016 financial statements are presented fairly, in all material respects, in accordance with accounting principles generally accepted in the United States of America. They identified two significant deficiencies in internal control over financial reporting: (1) controls over the Department’s modeling activities need Improvement, and (2) Department and Federal Student Aid management need to mitigate persistent information technology control deficiencies. They also identified one instance of reportable noncompliance with Federal law related to referring delinquent student loan debts to Treasury.

The auditors found that the fiscal years 2017 and 2016 financial statements are presented fairly, in all material respects, in accordance with accounting principles generally accepted in the United States of America. They identified two significant deficiencies in internal control over financial reporting: (1) controls over the Department’s modeling activities need Improvement, and (2) Department and Federal Student Aid management need to mitigate persistent information technology control deficiencies. They also identified one instance of reportable noncompliance with Federal law related to referring delinquent student loan debts to Treasury.

The report begins on page 86 of the Fiscal Year 2017 United States Army Annual Financial Report.

To request the Report on the Suitability of the Design of Controls in the United States Army's System Supporting the Delivery of Munitions Inventory Management Services and our transmittal, please contact Natasha Anderson, Director, General Fund Audit Readiness, at natasha.n.anderson7.civ@mail.mil.

States must make medical assistance available for Medicare deductibles, coinsurance, and copayments (cost-sharing) for certain individuals who are dually eligible to be enrolled in both Medicare and Medicaid.

This report summarizes the oversight work performed by EAC OIG during the 6-month period ended September 30, 2017.