Federal Reports

The CSB received an unmodified opinion on its fiscal years 2018 and 2017 financial statements.

OIG audited USDA’s consolidated financial statements for fiscal year 2018.

This report presents the results of the audit of Natural Resources Conservation Service’s (NRCS)balance sheet as of September 30, 2018. The report contains an unmodified opinion on thebalance sheet, as well as an assessment of NRCS’ internal controls over financial reporting andcompliance with laws and regulations.KPMG LLP, an independent certified public accounting firm, conducted the audit. In connectionwith the contract, we reviewed KPMG LLP’s report and related documentation and inquired ofits representatives

This year marks the 40th anniversary of the Inspector General Act and the creation of the original 12 Offices of Inspector General. Our office was established in 1989 as a result of 1988 amendments to the Act. Since that time, the community has grown to include 73 statutory Inspectors General who collectively oversee the operations of nearly all aspects of federally funded operations. Every six months, we are required by the Act to provide Congress a report detailing our independent oversight of Amtrak. This report—the 58th in our history—highlights our activities for the six months ending September 30, 2018.Our activities continued to focus on assessing the efficiency and effectiveness of Amtrak’s programs and operations while investigating allegations of fraud, waste, and abuse. Most recently, we reported our views of the top management and performance challenges facing Amtrak for fiscal years 2019 and 2020. We concluded that the company made progress across each of the challenge areas. In particular, the company reduced operating costs to the lowest amount in the past five fiscal years, and it institutionalized more effective management processes and tools. However, the company continues to face several longstanding challenges. Chief among them is improving its safety record, as employee and passenger fatalities increased to their highest levels since fiscal year 2015.Among other issues, our investigative work led to a $650,000 settlement from an alleged False Claims Act violation involving an Amtrak contractor. We also participated in multiple investigations of health care fraud that resulted in arrests and convictions in Florida and California. Additionally, we investigated a significant breach of the company’s ethics policy that involved collusion between an Amtrak employee and officials of a contractor on maintenance contracts worth $7.6 million.In the months ahead, we will continue to focus on high-risk areas of the company’s programs and operations and will unwaveringly pursue our vision of operating as a model OIG by developing objective products that provide value to company management, the Board of Directors, Congress, and the public. We also continue working with the 73 statutory Inspectors General that constitute the Council of Inspectors General on Integrity and Efficiency. We trust that you will find this report informative.

What We Looked AtWe contracted with the independent public accounting firm KPMG LLP to audit the Federal Aviation Administration's (FAA) 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 9, 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.RecommendationsFAA concurs with KPMG's five recommendations.

The Office of Inspector General (OIG) performed procedures that were requested and agreed to by Tennessee Valley Authority (TVA) management solely to assist management in determining the validity of the Winning Performance/Executive Annual Incentive Plan (WP) Measures for fiscal year (FY) ended September 30, 2018. The WP Measures data provided to the OIG and to which the agreed-upon procedures were applied is the responsibility of TVA management. In summary, procedures applied by the OIG found: • The FY2018 WP goals for the enterprise measures were properly approved. There were four change forms that clarified the definition sheet formulas for three separate measures. However, these change forms did not impact the measures, weights, and goals of the Enterprise measures.• The FY2018 goals (target) for the corporate multiplier measures were properly approved. • The actual FY to-date results for the enterprise measures agreed with the underlying support.• The actual FY to-date results for the corporate multiplier measures agreed with the underlying support, without exception.• The FY2018 WP payout percentage provided by the Benchmarking and Enterprise Performance organization on November 5, 2018, was mathematically accurate and agreed with the OIG’s recalculation.

The Office of the Inspector General audited TVA’s controls in place to prevent, detect, and respond to ransomware incidents. In summary, we found TVA management generally has appropriate controls in place to prevent, detect, and respond to a ransomware incident. However, for one selected system, we found inappropriate administrative access. To strengthen access controls, TVA currently has an ongoing project to identify, track, and monitor administrative accounts, which is expected to be complete in 2020. In addition, we found improvements were needed in the Ransomware Incident Action Plan. TVA’s Cybersecurity updated the Ransomware Incident Action Plan during our audit.