Federal Reports

Independent Auditor's Report and Financial Statements for the Fiscal Years Ended September 30, 2021 and 2020

The Reports Consolidation Act of 2000 requires each inspector general to prepare an annual statement summarizing what the inspector general considers to be “the most serious management and performance challenges facing the agency” and to briefly assess the agency’s progress in addressing those challenges.After robust research and analysis, the EPA OIG identified seven top management challenges that we believe represent the EPA’s greatest vulnerabilities to waste, fraud, abuse, and mismanagement and the EPA’s most significant barriers to accomplishing its mission during fiscal year 2022. In addition to three challenges retained from our previous top management challenges report, which we reshaped and refocused into two, we identified five new top challenges that focus on emerging or increased environmental and operational threats. These seven top challenges reflect overarching issues that affect multiple EPA programs and responsibilities and that may prevent the Agency from efficiently and effectively protecting human health and the environment:Mitigating the Causes and Adapting to the Impacts of Climate Change. The EPA must take a leadership role in limiting climate change and mitigating its effect on human health and the environment.Integrating and Leading Environmental Justice Across the Agency and Government. As part of its effort to integrate environmental justice across its programs, the EPA must address the environmental hazards and cumulative risk facing at-risk communities and effectively communicate that risk to those communities.Ensuring the Safe Use of Chemicals. The EPA must develop timely and accurate chemical risk assessments to identify acceptable exposure levels for humans and the environment.Safeguarding Scientific Integrity Principles. Science-based decisions at the EPA must be based on principles of scientific integrity to ensure that human health and the environment are protected by using the best-available science.Ensuring Information Technology and Systems Are Protected Against Cyberthreats. Information technology is a fundamental and essential resource for the EPA to carry out its mission.Managing Infrastructure Funding and Business Operations. The EPA must effectively oversee the funding and operation of America's water, wastewater, and other environmental infrastructure.Enforcing Environmental Laws and Regulations. Through enforcement, the EPA ensures that regulated entities are following environmental laws and will continue to do so, as enforcement actions effectively deter future noncompliance.

The Office of Inspector General (OIG) contracted with the independent certified public accounting firm of Harper, Rains, Knight & Company, P.A. (HRK) to audit the financial statements of the U.S. Equal Employment Opportunity Commission (EEOC) for fiscal years ended September 30, 2021 and 2020, and to report on EEOC's internal controls over financial reporting, and compliance with laws, regulations, contracts, and other matters. The contract required that HRK conduct the audit in accordance with U.S. generally accepted government auditing standards (GAGAS) contained in Government Auditing Standards, issued by the Comptroller General of the United States, and Office of Management and Budget (OMB) audit guidance, and U.S. Government Accountability Office/Council of the Inspectors General on Integrity and Efficiency Financial Audit Manual.

What We Looked AtWe contracted with the independent public accounting firm KPMG, LLP to audit the Federal Aviation Administration’s (FAA) consolidated financial statements as of and for the fiscal years ended September 30, 2021, and September 30, 2020. KPMG was also required to provide an opinion on those financial statements, report on internal control over financial reporting, and report on compliance with laws and other matters. The contract required the audit to be performed in accordance with U.S. generally accepted Government auditing standards, Office of Management and Budget audit guidance, and the Governmental Accountability Office’s and Council of the Inspectors General on Integrity and Efficiency’s Financial Audit Manual. We performed a quality control review of KPMG’s report dated November 9, 2021, and related documentation, and inquired of its representatives. What We FoundOur quality control review disclosed no instances in which KPMG did not comply, in all material respects, with U.S. generally accepted Government auditing standards. RecommendationsFAA concurred with KPMG’s three recommendations. We agree with KPMG’s recommendations and are not making any additional recommendations.

Pursuant to the Reports Consolidation Act of 2000, the Office of Inspector General must issue an annual statement summarizing what the Inspector General considers the most serious management and performance challenges facing the Department of Homeland Security and assessing its progress addressing them.