Federal Reports

The U.S. Small Business Administration (SBA) Office of Inspector General (OIG) contracted with the independent certified public accounting firm KPMG LLP to conduct an audit of SBA’s consolidated balance sheets as of September 30, 2024 and 2023 and the related notes to these statements. Our contract with KPMG required that the audit be performed in accordance with auditing standards generally accepted in the United States of America, Government Auditing Standards issued by the Comptroller General of the United States, and Office of Management and Budget (OMB) Bulletin No. 24-02, Audit Requirements for Federal Financial Statements.

In the audit, KPMG reported significant matters for which they were unable to obtain sufficient and appropriate audit evidence to provide a basis for an audit opinion on SBA’s balance sheet as of September 30, 2024. Accordingly, KPMG issued a disclaimer of opinion on the consolidated balance sheets as of September 30, 2024 and 2023.

The basis for the disclaimer was that due to inadequate processes and controls, SBA was unable to provide adequate evidential matter in support of a significant number of transactions and account balances related to the Paycheck Protection Program, Economic Injury Disaster Loan program, Restaurant Revitalization Fund, and the Shuttered Venue Operators Grant program.

As a result, KPMG was unable to determine whether any adjustments might have been necessary with respect to the following:

• Credit program receivables and related foreclosed property,
• Other than intragovernmental accounts receivable,
• Downward re-estimate payable to Treasury, and
• Loan Guarantee Liabilities and the related notes.

For the period that ended September 30, 2024, KPMG identified seven material weaknesses and two significant deficiencies in internal control over financial reporting. Appendixes I and II of this report describe details of KPMG’s conclusions about the material weaknesses and significant deficiencies. Appendix III describes instances of noncompliance with applicable laws or other matters required to be reported under Government Auditing Standards or OMB Bulletin No. 24-02.

We provided a draft of the KPMG report to SBA’s Chief Financial Officer, who concurred with its findings and recommendations and agreed to implement the recommendations. The Chief Financial Officer stated that SBA has undergone tremendous effort to strengthen internal controls, policies, and procedures and will continue remediation efforts in the coming audit year.

We engaged an independent public accounting (IPA) firm to audit DIA’s Fiscal Year (FY) 2024 financial statements. We evaluated the reliability of data supporting the financial statements, determined the reasonableness of the statements produced, and examined disclosures in accordance with applicable guidance. We issued the results of our evaluation in a final report dated November 15, 2024.

The CFTC OIG contracted with the independent public accounting firm of Williams, Adley & Company, LLP (Williams Adley) to audit the financial statements of CFTC as of and for the fiscal years ended September 30, 2023, and 2024, to provide a report on internal control over financial reporting, report on compliance with laws and other matters, and provide an opinion on whether CFTC’s financial management systems complied substantially with the requirements of the Federal Financial Management Improvement Act of 1996 (FFMIA).

Our Objective(s)To perform a quality control review (QCR) of KPMG, LLP's audit of FAA's financial statements as of and for the fiscal years ended September 30, 2024, and September 30, 2023. We reviewed KPMG's report, dated November 8, 2024, and related documentation.
About This ReportWe contracted with the independent public accounting firm KPMG, LLP to audit FAA's financial statements, provide an opinion on those financial statements, report on internal control over financial reporting, and report on compliance with laws and other matters.
What We FoundThe independent auditor, KPMG, found no significant deficiencies in internal control over financial reporting that it considered to be a material weakness.
Our QCR disclosed no instances in which KPMG did not comply, in all material respects, with U.S. generally accepted Government auditing standards.
RecommendationsKPMG made no recommendations.

Package Manager is part of the Centralized Benefits Communication Management Program introduced in 2018 to modernize VBA mailing. The application bundles documents from veterans’ electronic claims folders and standard enclosures into virtual packages for printing and mailing. Employees then must click a “send” button to move the package to a centralized print vendor. If a send button is not clicked, the package for that recipient remains unsent.

The review team found that, due to a lack of oversight, about 2.1 million packages created from January 2018 through October 2022 were still unsent as of November 10, 2022. After reviewing statistical samples of unsent packages, the OIG team estimated about 801,000 of the 2.1 million packages lacked evidence of the letters being sent to one or more of the intended recipients.

VBA leaders did not establish controls for unsent packages because they did not anticipate that employees would create packages but not send them. Furthermore, quality reviews by VBA had not identified a trend of employees failing to send packages.

While some unsent packages did not affect veterans’ benefits, others might have, such as those requesting evidence for claims that were ultimately denied. In these cases, VBA did not fulfill its requirement to help veterans obtain evidence. The OIG team could not determine what would have happened had these letters been sent. Still other packages included required letters notifying veterans of decisions on their claims. These notices are critical so that veterans understand the decisions’ effects on their benefits and options for seeking further review.

The OIG recommended that the under secretary for benefits implement plans to provide oversight for unsent packages and to address packages the team identified in this review as unsent.

The VA Office of Inspector General (OIG) conducted a national review to evaluate Veterans Health Administration’s (VHA’s) implementation of the PACT Act of 2022, which mandated veteran toxic exposure screenings, and required clinical staff training.

Section 603 of the PACT Act mandated that, within 90 days of the date of enactment, VHA implement a health screen to identify potential toxic exposures during military service. The Act requires VHA to screen veterans and address issues specific to toxic exposures during military service.

VHA developed a method of screening, and as of November 30, 2023, screened over four million of the nine million enrolled veterans. VHA also complied with requirements to train clinical staff to “identify, treat, and assess the impact on veterans of illnesses related to toxic exposures.”

VHA issued memorandums to Veterans Integrated Service Network (VISN) and facility directors requiring additional toxic exposure screening training for clinical staff. However, 21.4 percent of clinical staff completed training prior to performing a screening during the period November 8, 2022, through January 9, 2023. Although training compliance increased after VHA issued additional guidance in January 2023, many veterans were likely screened by clinical staff who had not completed training.

The OIG did not assess the impact of screening on primary care workload, but VHA leaders acknowledged toxic exposure screening adds to workload and had not evaluated nor considered mitigating efforts for the additional workload burden.

The OIG made two recommendations to the Under Secretary for Health related to assessing training noncompliance and evaluating the impact of toxic exposure screening on primary care.