Two “significant deficiencies” in the Consumer Financial Protection Bureau’s financial reporting for the past two years and detected in a Government Accountability Office audit have prompted four new recommendations.
The GAO audited the CFPB’s fiscal years 2012 and 2013 financial statements and identified two flaws in the bureau’s internal control over financial reporting in a December 2013 report. On May 2, 2014, the office sent CFPB director Richard Corday another report with additional information and related recommendations.
“[The] CFPB did not effectively design or implement internal control over its year-end accrual process to ensure accounts payable amounts recorded were complete and accurate and controls to ensure accurate and complete recording of its property and equipment transactions,” GAO said of its initial report’s findings.
These deficiencies increase the risk that the CFPB won’t detect and correct errors in time to prevent misstatement of its financial statements, said GAO.
New recommendations for the CFPB include developing a details guidance and training system for the contracting officer representatives to further assist them in identifying and estimating accruals and creating control procedures and reviewing underlying supporting documents that ensure property and equipment costs are properly capitalized or expensed as appropriated.
The GAO also recommends strengthening the design and implementation of control procedures regarding the review of the accounts payable estimates to include variance analysis of calculations and comprehensive review of obligating documents.
“These recommendations are intended to improve CFPB’s oversight and controls in these areas as well as to bring CFPB into conformance with its own policies, Standards for Internal Control in the Federal Government, federal accounting standards, or a combination thereof,” says GAO. “CFPB stated that it agreed with the recommendations GAO made in the report and has implemented or is in the process of implementing actions to address the issues GAO identified.”
Written by Alyssa GeracePrint Article