Federal Reports

The OIG investigated allegations that Prime 8, LLC, a company that conducted oil and gas operations and inspections in the Gulf of Mexico, violated departmental regulations and created records to support fictitious inspections of offshore platforms regulated by the Bureau of Safety and Environmental Enforcement (BSEE).We found the company did not perform platform visits and inspections as required, and documents prepared by the company’s owner concealed that the mandatory platform visits had not occurred. Because of the inaccuracies in the company’s documents, BSEE inspectors could not have known that the company did not complete the required inspections.We referred our investigation to the U.S. Attorney’s Office for the Southern District of Texas, which declined prosecution.

The auditors expressed the opinion that the closing package financial statements referred to above present fairly, in all material respects, the financial position of the United States Department of Education as of September 30, 2018, and its net cost and changes in net position for the year then ended in accordance with U.S. generally accepted accounting principles. The auditors noted that their our audit of the general-purpose financial statements as of and for the year ended September 30, 2018 disclosed the following material weakness, significant deficiency, and compliance and other matters: (1) Material Weakness-Controls over the Reliability of Information Used in the Modeling Activities Need Improvement; (2) Significant Deficiency-Information Technology Controls Need Improvement; (3) Compliance and Other Matters-Requirement for Referring Delinquent Student Loan Debts to Treasury.

OIG audited USDA’s closing package financial statements for FY 2018 andassessed internal controls over financial reporting and compliance with reportingrequirements.

What We Looked AtWe contracted with the independent public accounting firm of Leon Snead & Company, PC to audit the Surface Transportation Board's (STB) financial statements as of and for the fiscal years ended September 30, 2018, and September 30, 2017, and to provide a report on internal control over financial reporting and compliance with laws and other matters. The contract required that the audit 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. In connection with the contract, we performed a quality control review of Leon Snead's report dated November 6, 2018, related documentation, and inquired of its representatives.What We FoundOur quality control review disclosed no instances in which Leon Snead did not comply, in all material respects, with U.S. generally accepted Government auditing standards.RecommendationsSTB concurs with Leon Snead's five recommendations.

What We Looked AtWe contracted with the independent public accounting firm KPMG LLP to audit the Department of Transportation's (DOT) financial statements as of and for the fiscal years ended September 30, 2018, and September 30, 2017, and to provide a report on internal control over financial reporting and compliance with laws and other matters. The contract required that the audit 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. In connection with the contract, we performed a quality control review of KPMG's report dated November 13, 2018, 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.RecommendationsDOT concurs with KPMG's four recommendations.

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