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Audit of AmeriCorps’ Fiscal Year 2023 National Service Trust Fund Financial Statement

Date Issued
Report Number
OIG-AR-24-02
Report Type
Audit
Description
The National Service Trust holds the funds set aside to pay the education awards of national service members who successfully complete their service terms. Responsibility for the education awards that have been earned or will be earned in the near future is the largest liability on AmeriCorps’ financial statements at $315 million. AmeriCorps has been unable to produce auditable financial statements for the last seven years. This year, independent auditors issued another disclaimer of opinion, reporting five material weaknesses and one significant deficiency. All the material weaknesses are recurring, two of them since FY 2017, one since FY 2018, one since FY 2021, and one since FY 2022. Further, AmeriCorps’ financial statements and accompanying notes were not in accordance with U.S. Generally Accepted Accounting Principles and Office of Management and Budget Circular A-136. In recognition of the pervasive weaknesses in internal control, AmeriCorps included in its Annual Management Report 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. This is the fourth year that AmeriCorps has issued a No Assurance statement. Remedial actions by AmeriCorps have closed one of the 41 prior year recommendations. The remaining 40 recommendations continue to be valid, four of them in modified form. The auditors also made six new recommendations, for a total of 46. AmeriCorps acknowledged the disclaimer of opinion and expressed concurrence to one material weakness and one significant deficiency, however, AmeriCorps did not concur with the remaining four material weaknesses. However, AmeriCorps did not specify which material weaknesses they were in agreement or disagreement. AmeriCorps reiterated their focus on remediating long-standing issues. The independent accounting firm RMA Associates LLC performed the audit of the AmeriCorps FY 2023 National Service Trust Fund 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

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Design and implement control activities to address 8 of the 17 Government Accountability Office Green Book framework principles that were not sufficiently designed during its FY 2023 Entity Level Control assessment. (New)

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Identify resource capabilities and needs, then recruit, train, develop, and retain financial leaders and personnel with relevant Federal financial management capabilities to achieve operations, reporting, and compliance objectives, complete and document performance evaluations in a readily accessible form, and hold individuals accountable for related control responsibilities. (Modified Repeat)

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Ensure its fraud risk management process includes external risk factors such as grantee and subgrantee recipients in its standard operating procedures for the agency risk profile. This process should include: (New)

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A scheduled risk assessment, mitigation plan, and monitoring and reporting (e.g., relating to grantee and subgrantee recipients);

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An integration of the fraud risk components for known, suspected, and alleged fraud risks;

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Documentation on how the fraud risk components integrate;

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How the risk scoring is conducted and applied;

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The use of the results of monitoring, evaluation, audits, and investigations to improve fraud prevention, detection, and response; and

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Guidance for adequate documentation on the risk determination reviews to match risk ratings or detect errors within the risk assessment.

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Provide internal training that addresses:

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Management’s overall responsibility for establishing internal controls to manage the risk of fraud, and the related impact on the financial statements; and

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The connection between potential and known fraud by the grantee and subgrantee recipients and the impact that fraud may have on the underlying financial data being provided by the recipients and ultimately used for the preparation of information reported in the financial statements.

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Establish policies and procedures on financial reporting in compliance with standards and guidance (i.e., U.S. generally accepted accounting principles, Office of Management and Budget Circular No. A-136, and the U.S. Standard General Ledger), which should include an end-to-end business process and flowcharts. (New)

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Develop and implement standard operating procedures to ensure the applicable line items in the trust statement of bugetary resources are properly reconciled to the SF 132, Apportionment and Reapportionment Schedule, and differences are properly documented, explained, and available upon request. (New)

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Complete a comprehensive fluctuation analysis for its trust financial statements that is supported and detailed enough to allow management to detect accounting errors or evaluate the reasonableness of balances. (Modified Repeat)

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Develop and implement standard operating procedures for a comprehensive fluctuation analysis to ensure the fluctuation analysis is properly reviewed, approved, and validated in a timely manner by appropriate AmeriCorps resources and account balances are accurate as of and through the reporting period. (Modified Repeat)

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Establish, implement, and document policies and procedures that outline the roles and responsibilities of AmeriCorps and its service provider, such as an end-to-end business processes narrative with flowcharts related to journal entries activity. (New)

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Monitor outstanding balances resulting from financial system configuration issues and fix the issues for future transactions to be interfaced into the shared service provider’s financial management system, Oracle. (Modified Repeat)