Federal Reports

We consider the most serious management and performance challenges facing DHS to be: performing fully and effectively during COVID-19, countering terrorism and homeland security threats, ensuring proper financial management, ensuring information technology (IT) supports essential mission operations, improving Federal Emergency Management Agency’s (FEMA) contracts and grants management, disaster assistance, and fraud prevention, and strengthening oversight and management of major systems acquisition. Meeting these challenges requires unity of effort, a commitment to mastering management fundamentals, and the identification and allocation of appropriate resources. As we have noted in previous Major Management and Performance Challenges reports, many of the Department’s senior leadership positions still do not have permanent, Presidentially appointed and Senate confirmed officials.

KPMG issued an unmodified (clean) opinion on the financial statements, reporting that they present fairly, in all material respects, DHS’ financial position as of September 30, 2020. However, KPMG identified material weaknesses in internal control in two areas and other significant deficiencies in three areas. Consequently, KPMG issued an adverse opinion on DHS’ internal control over financial reporting. KPMG also reported three instances of noncompliance with laws and regulations. DHS concurred with all of the recommendations.

U.S. Customs and Border Protection (CBP), United States Secret Service, Immigration and Customs Enforcement (ICE), and Transportation Security Administration (TSA) have not fully complied with DHS’ guidelines for implementing the Lautenberg Amendment. To illustrate, CBP and Secret Service did not ensure law enforcement officers completed annual Lautenberg Amendment certifications as required. CBP and ICE also did not use available resources to monitor law enforcement officer arrests and convictions subject to the Lautenberg Amendment. None of the four components provided domestic violence awareness training to law enforcement officers as required by the implementing guidelines. We made three recommendations that will enhance the components’ ability to ensure compliance with DHS’s guidelines for implementing the Lautenberg Amendment. One recommendation is closed and the other two recommendations are resolved and open.

We conducted this limited review to identify the U.S. Department of Housing and Urban Development’s (HUD) Coronavirus Aid, Relief, and Economic Security Act (CARES Act) drawdown levels for the initial round of Emergency Solutions Grants (ESG) funding. In addition, we researched information published by grantees on how they have used and will use their funds. Our objective was to highlight the grantees’ (1) drawdown levels for the initial round of ESG CARES Act funding and (2) published information on how the funds have and will be used. Our review determined that as of July 1, 2020, the ESG CARES Act drawdown levels for the initial round of funding of $1 billion had been minimal. In addition, a majority of grantees in our sample had not elected to waive their citizen participation plans or indicated whether they would use their consultation waiver, and many had not published their planned uses of the funds. We did not make any recommendations to HUD.

This report presents the results of our audit of Ginnie Mae’s fiscal year 2020 financial statements, including our report on Ginnie Mae’s internal control and test of compliance with selected provisions of laws, regulations, and contracts applicable to Ginnie Mae. In fiscal year 2020, we were able to obtain sufficient, appropriate evidence to express an unmodified opinion on the fairness of Ginnie Mae’s financial statements. We also reported one significant deficiency in its Report on Internal Control Over Financial Reporting and no reportable compliance issues in its Report on Compliance With Laws, Regulations, and Contracts. Specifically, we reported that Ginnie Mae had a significant deficiency in the control design of its organizational structure for two key functions, estimation model development and model verification, within its Office of Enterprise Risk. We further reported that this control deficiency potentially prevents an effective challenge to models used to develop significant estimates for financial reporting.