Federal Reports

As required by law, the Department of Transportation (DOT) Office of Inspector General reports annually on DOT's most significant challenges to meeting its mission. We considered several criteria in identifying ten DOT’s top management challenges for fiscal year 2018, including their impact on safety, documented vulnerabilities, large dollar implications, and the ability of the Department to effect change.

We contracted with the independent public accounting firm, CliftonLarsonAllen LLP (CLA), to audit VA’s financial statements as of September 30, 2017 and 2016, and for the fiscal years (FY) then ended. This audit is an annual requirement of the Chief Financial Officers Act of 1990. CLA provided an unmodified opinion on VA’s financial statements for FYs 2017 and 2016. With respect to internal control, CLA identified six material weaknesses: compensation, pension, burial, and education actuarial estimates; community care obligations, reconciliations, and accrued expenses; financial reporting; loan guarantee liability; Chief Financial Officer organizational structure; and information technology security controls. CLA further identified one significant deficiency: procurement, undelivered orders, accrued expenses, and reconciliations. CLA also reported VA’s substantial noncompliance with Federal financial management systems requirements and the United States Standard General Ledger at the transaction level under the Federal Financial Management Improvement Act (FFMIA). They noted improvements were needed in complying with the Federal Managers’ Financial Integrity Act. They cited instances of noncompliance with Title 38 United States Code §5315 pertaining to the charging of interest and administrative costs; noncompliance with Title 38 United States Code §3733 pertaining to the vendee loan program; and one violation of the Antideficiency Act, as reported to CLA by VA, which has been reported to Congress. VA is in the process of reporting five other violations. They also noted noncompliance with the Improper Payments Elimination and Recovery Act for FY 2016, as reported by the Office of Inspector General. CLA made recommendations for addressing each of the material weaknesses and significant deficiency. CLA is responsible for its audit report dated November 15, 2017 and the conclusions expressed in it.

This report should not be distributed without the accompanying financial statements on which it is based. To request a copy of the financial statements and report, file a Freedom of Information Act request with the Office of the Secretary of Defense: https://www.esd.whs.mil/FOID/foi/

The report begins on page 149 of Section 3 of the United States Department of Defense Agency Financial Report for Fiscal Year 2017, which is hosted on the website of the Under Secretary of Defense (Comptroller). https://comptroller.defense.gov/odcfo/afr2017.aspx

To request the Army financial statement, the independent auditor's report, and our transmittal, please contact Natasha Anderson, Director, General Fund Audit Readiness, at natasha.n.anderson7.civ@mail.mil.