Federal Reports

Semiannual Report to Congress: April 1, 2025, through September 30, 2025

The independent public accounting firm KPMG LLP (KPMG) under contract with the DHS, Office of Inspector General, has issued an unmodified (clean) opinion on DHS’s fiscal year 2025 consolidated financial statements.  KPMG noted that the financial statements present fairly, in all material respects, DHS’s financial position as of September 30, 2025. KPMG issued an adverse opinion on DHS’s internal control over financial reporting as of September 30, 2025. The report identifies material weaknesses in internal control in five areas: 1. Information Technology Controls and Information Systems 2. Financial Reporting 3. Taxes Receivable, Net 4. Construction in Progress 5. Internal Control Monitoring KPMG also identified a significant deficiency related to Grant Recipient Monitoring as well as noncompliance with the following two laws: 1. Federal Managers’ Financial Integrity Act of 1982 2. Federal Financial Management Improvement Act of 1996. 

The Inflation Reduction Act of 2022 allocated $8.8 billion to the Department of Energy for issuing grants to states, U.S. territories, and Indian Tribes for distribution to the public in the form of home energy rebates. The Department’s Office of State and Community Energy Programs is responsible for oversight and guidance of the $87.6 million of grants awarded to the New Mexico State Energy Office (NMSEO).

We initiated this inspection to assess the NMSEO’s internal controls to administer the Home Energy Rebates programs under the Inflation Reduction Act of 2022.

We found that the NMSEO had not established a comprehensive internal controls system, though it has offered rebates since September 2024. Specifically, the NMSEO did not: (1) identify, assess, and document potential risks that could prevent the programs from achieving stated objectives; (2) document important control activities; and (3) ensure the activities of the implementing company aligned with what the Office of State and Community Energy Programs had approved.

Additionally, we identified areas of potential risk related to the NMSEO’s proposed plan to contract a company to implement a multifamily energy rebates program. Under the proposed plan, the multifamily implementing company would oversee its own work for installing energy-saving equipment and approving rebate requests. Additionally, the implementing company did not plan to verify self-reported household income or follow up with property owners to ensure they meet certain occupancy and rent requirements.

A fully established internal controls system helps protect Department funds and meet program objectives. Further, without well-documented policies and procedures, continuity of operations for the programs could be at risk when personnel normally assigned to complete those procedures are unavailable.

To address the issues identified in this report, we made one recommendation and one suggested action that, if fully executed, should help strengthen the NMSEO’s internal controls to implement the Home Energy Rebates programs.

The United States Capitol Police (USCP or the Department) does not pay its employees assigned to and working in locations outside of the Washington D.C. metropolitan area (hereinafter referred to as DC) in accordance with 2 U.S.C. § 1927 (Bonuses retention allowances, and additional compensation); the Capitol Police Board Regulations for Recruitment and Relocation Bonuses and Retention Allowances for Employees of the United States Capitol Police; and best practices throughout the federal government. Specifically, the USCP Office of Inspector General (OIG) found that while USCP provided additional locality pay for employees assigned in a higher cost-of-living area, the Department did not adjust locality pay for employees assigned in lower cost-of-living areas. 

The Chief Financial Officers Act of 1990 requires the Inspector General to audit the agency’s financial statements each year, which is intended to help improve an agency’s financial management and controls over financial reporting. For FY 2025, the auditors issued an unmodified opinion on the FY 2025 consolidated financial statement of the Department. The auditors reported that the FY 2025 consolidated financial statement is presented fairly, in all material respects, in accordance with U.S. generally accepted accounting principles. In the Report on Internal Control over Financial Reporting, the auditors identified one material weakness and three significant deficiencies in internal control over financial reporting. In the Report on Compliance and Other Matters, the auditors reported no instances of noncompliance that were required to be reported under Government Auditing Standards or OMB Bulletin No. 24-02. Seven recommendations were made to the Department to address the internal control findings.  Management concurred with the findings and agreed to take action to address the recommendations.  See pages 84-96 for the report.