Overview

Bureau of the Comptroller and Global Financial Services
Report
February 18, 2015




Department of State: The Department is steadfast in its commitment to the American people to sustain prudent fiscal and resource management while providing the administrative operating platform for more than 45 other U.S. Government entities overseas in support of our vital foreign affairs mission. The Department received an unmodified or "clean" opinion from the Independent Auditor for the FY 2014 and FY 2013 Financial Statements with no reported material weaknesses in internal controls over financial reporting.

USAID: USAID's independent auditor issued a disclaimer for USAID's FY 2014 financial statements and for USAID's re-stated FY 2013 financial statements, a change from the unmodified opinion issued in FY 2013.

In FY 2014, USAID initiated an expanded effort to comprehensively reconcile the general ledger (GL) with the subsidiary ledgers (SL) to fully address our Funds Balance with Treasury material weakness. Given the scope of the effort and our engagement with the Office of Inspector General, we are disappointed that this resulted in a disclaimed opinion for the FY 2014 Agency Financial Statements, as well as a reversal of the unmodified opinion for the FY 2013 Statements. Throughout the process, we were confident that our fully documented methodology to reconcile the cash fund balance with Treasury (FBWT) was sound and set an appropriate direction to fully address the material weakness. The GL is the source for the financial statements and other external reports, while the SLs control obligational authority and spending. Also, fundamental accounting principles require reported GL balances to be supported by the underlying transactions recorded in the SL. The Agency believes that our reconciliation methodology satisfies this fundamental requirement.

The OIG stated in the disclaimer of opinion that "USAID was unable to provide sufficient support to validate the adjustments and we were not able to extend our audit procedures or perform alternative procedures to do so." The Agency provided workbooks that demonstrated the SL and GL comparisons and the subsequent GL adjustments. USAID also provided support for a subsample of adjustments as requested by the OIG.

The Agency's adjusted GL balances met Treasury's Government-wide Treasury Accounting Symbol Adjusted Trial Balance System (GTAS) reporting requirements. While the sample analysis provided insight and affirmed the direction taken, the items identified by the OIG as lacking sufficient documentation were events that occurred beyond its records retention threshold. As a result, the Agency understood from the OIG that they would augment the sample to include items within the records retention period. However, the Agency was not asked to provide additional samples to replace those with documentation beyond the retention period.