Results of Consulting Engagement on Potential Risks Related to the Integrated Financial and Acquisition Management System and Future VA Financial Statement Audits

The VA Office of Inspector General (OIG) contracted with the independent public accounting firm CliftonLarsonAllen LLP (CLA) to provide consulting services related to the deployment of VA’s new general ledger system known as the Integrated Financial and Acquisition Management System (iFAMS) and potential risks to the auditability of future VA financial statements. CLA did not perform an audit of iFAMS, and this engagement was not a financial statement audit. CLA expressed neither an opinion nor a conclusion on the effectiveness of VA’s controls over any part of its financial statements or the internal controls of iFAMS. However, CLA’s observations include that VA has not adequately described how the roles and responsibilities of two contractors relate to VA management’s control objectives; has not documented procedures describing controls to ensure the completeness and accuracy of financial data transmitted from iFAMS to the Management Information Exchange (MinX) system, an application used to consolidate general ledger activities from the Financial Management System and iFAMS for external financial reporting; is not periodically reconciling various reports to the iFAMS general ledger; has not prepared a risk assessment of financial statement auditability focusing on the iFAMS implementation; and continues to rely on lump sum adjustments by financial personnel as an interim fix to correct balances in iFAMS. The OIG generally releases a management advisory memorandum to provide information on matters of concern that the OIG has gathered as part of its oversight mission. In this instance, the consulting engagement resulted in information that OIG leaders felt should be brought to VA’s attention. The OIG will use the information gained from this engagement when planning future audits of VA’s financial statements.