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Audit of AmeriCorps’ Fiscal Year 2021 Consolidated Financial Statements

Date Issued
Report Number
OIG-AR-22-01 (AmeriCorps OIG)
Report Type
Audit
Description
Since FY 2017, independent auditors have declined to issue an opinion on AmeriCorps’ financial statements. This year, they again issued a disclaimer of opinion, reporting nine material weaknesses and one significant deficiency. Eight of the material weaknesses are recurring, three of them since FY 2017 and five since FY 2018. AmeriCorps acknowledged at the beginning of the audit that it had not made progress in addressing five of the material weaknesses and requested that they be excluded from the scope of the audit. The auditors have therefore continued to report the following findings and the associated recommendations related to: data underlying the Trust Obligations and Liability Model; Undelivered Orders for Procurement; Undelivered Orders for Grants; Recoveries of Prior Year Obligations; and Other Liabilities, as well as noncompliance with the Single Audit Act. Based on their work in FY 2021, the auditors found modified-repeat material weaknesses in AmeriCorps’ Internal Controls Program; Financial System and Reporting; and Grant Accrual Payable and Advances, plus a new material weakness related to AmeriCorps’ Migration to a Shared Services Provider. AmeriCorps has closed ten of the 75 recommendations outstanding since FY 2019. The remaining 65 recommendations continue to be valid, eight of them in modified form. The auditors also made eight new recommendations, for a total of 73. The auditors noted that AmeriCorps lacks a strategic plan to bring the agency to an auditable condition and had not created corrective action plans for most of the material weaknesses and the significant deficiency. In recognition of the pervasive weaknesses, AmeriCorps included in its Annual Management Report (AMR) a Statement of No Assurance, acknowledging that the agency could not provide reasonable assurance as to the effectiveness of internal control over financial reporting, operations, including programmatic operations, and compliance with laws. FY 2021 AMR, p. 22. This is the second year that AmeriCorps has issued a No Assurance statement. AmeriCorps has been unable to produce auditable financial statements for the last five years. Given the state of internal control at AmeriCorps, the unaudited financial statements published by the agency likely contain material errors and should not be relied upon. AmeriCorps’ response to the audit report acknowledged the findings and recommendations but did not agree or disagree with them. In promising improvements, the Chief Financial Officer stated: AmeriCorps is committed to implementing strategic reforms to the agency’s audit management and resolution efforts, focusing heavily on agency audit readiness, improving operational and programmatic internal controls, and increasing senior leadership engagement in corrective action planning and oversight. Audit Report, p, 27. The independent accounting firm of CliftonLarsonAllen LLP, performed the audit of the AmeriCorps FY 2021 consolidated financial statements, under contract with AmeriCorps-OIG.
Joint Report
No
Agency Wide
Yes
Questioned Costs
$0
Funds for Better Use
$0
View report on Oversight.gov

Open Recommendations

Body

Perform a risk assessment over the current state of the conversion to ARC and work jointly with ARC, senior leadership, Office of Chief Risk Officer, and functional groups affected by the risk to develop a mitigation strategy and execute a realistic and properly designed corrective action plan. (new)

Body

Continue coordinating with ARC to ensure that its accounting platform is compatible with AmeriCorps’ operations and the type of accounting transactions that AmeriCorps processes. (Modified Repeat).

Body

Conduct a review of transactions processed in Momentum and already migrated to Oracle through interface or reported in Oracle using journal entries, to ensure that correct object class codes were applied. (New)

Body

Establish controls and training to ensure that each functional office/unit performs an independent assessment of internal controlsto inform the CEO’s statement of assurance, even if unfavorable outcomes are expected. This proactive approach will promote the early detection of potential findings and allow for prompt remediation. (New).

Body

Develop and implement audit readiness procedures to ensure that audit information is complete, accurate, has undergone proper quality control procedures, and readily available or can be retrieved timely. The audit readiness procedures should include audit coordination protocol with ARC that clearly define roles and responsibilities of all parties involved in the process. (New)

Body

Continue working with Administrative Resource Center to review and correct AmeriCorps’ balances in detail to ensure they are properly supported and that balances migrated to the ARC platform are complete, accurate, and reliable. (Modified Repeat)

Body

Strengthen its policies and procedures over the processing of JEs going forward now that AmeriCorps has transitioned to the shared service environment. The policies and procedures should cover the following:

Body

A process to track the sequence of JE transactions for completeness.

Body

A policy as to when it is appropriate to use a JE and approval procedures for JEs recorded to ensure segregation of duties.

Body

A requirement to provide a fact-specific description of the purpose of the JE, along with adequate supporting documentation.

Body

Documentation needed to support JEs and how it will be maintained. (Modified Repeat).

Body

Validate and ensure JEs are properly supported, documented, and are readily available for examination. (Modified Repeat)

Body

Validate that the underlying data used in the accrual methodology, such as the use of grantee Undelivered Order balances to allocate accrual amounts, is reliable by ensuring previously reported conditions are remediated and recommendations are implemented. (New)