Audit of the Corporation for National and Community Service’s Fiscal Year 2019 National Service Trust Fund Financial Statements
Open Recommendations
The process to determine and document CNCS’s balance fluctuation expectations. Expectations should be documented based on a combination of internal and external operating factors, and program and financial relevant information available.
The materiality threshold used to determine significant balance fluctuations that require further research should be more conservative than that used by external auditors.
Detailed process to research significant balance fluctuations. CNCS should research and explain all significant balance fluctuations at the account and transaction level. Maintain and have the supporting documentation readily available.
Research and retain supporting documents required for any identified account balance differences derived from its abnormal balance review or the tie point analysis.
Address fatal and non-fatal Government-wide Treasury Account Symbol Trial Balance edit failures.
Address all balance differences and retain supporting documentation of related research.
Document and maintain support for all prior period adjustments and changes to Net Position accounts, Cumulative Result of Operations, and Unexpended Appropriations. (repeat)
Strengthen coordination between Accounting and Financial Management Services and the Office of Budget to ensure that transactions are recorded accurately and timely. (modified repeat)
Tracking the sequence of SVs/JVs for completeness;
Appropriate use of SVs/JVs;
Determining and maintaining relevant documentation to support each SV/JV;
Use of specific and accurate SV/JV descriptions; and
Timely review and approval of SVs/JVs for accuracy and propriety. (modified repeat)
Complete the Trust Accounting Handbook to clearly reflect the assumptions used in the Trust Obligation and Liability Model and the Monthly Obligation and Liability Calculator, including establishing control activities; finalize materiality thresholds applied; update accounting transactions, and clearly identify periods when adjustments will be made regardless of materiality. (new)
Strengthen controls to ensure the Trust modeling is performed by trained personnel to: (a) Conduct detailed analysis and validation of data sources. (b) Review and ensure the reasonableness of assumptions used and document the rationale behind estimation assumptions. (c) Consider changes in conditions or programs that require further research and analysis. Update the assumptions when necessary. (d) Compare estimates with subsequent results to assess the reliability of the assumptions and data used to develop estimates.
Conduct detailed analysis and validation of data sources.
Review and ensure the reasonableness of assumptions used and document the rationale behind estimation assumptions.
Consider changes in conditions or programs that require further research and analysis. Update the assumptions when necessary.
Compare estimates with subsequent results to assess the reliability of the assumptions and data used to develop estimates.
Document and implement policies and procedures to include the following: (a) Establish a thorough and robust quality control process to ensure that the Trust Obligation and Liability Model (TOLM) and Monthly Obligation and Liability Calculator (Calculator) are reviewed by qualified CNCS personnel prior to relying on its outputs to record transactions. All errors identified for which management ultimately decided against making updates to the TOLM or Calculator should be documented along with an explanation as to how management arrived at the final decision; (b) Perform monthly reviews and reconciliations of the recorded new and outstanding obligations to ensure the accounting information is valid and proper; (c) Review obligation amounts to ensure amounts accurately reflect the status of the obligation; (d) Review obligations to verify that amounts, timeframe (i.e., grant dates are correctly reflected in the obligation); (e) Ensure obligations are sufficiently supported (i.e., by documentary evidence); and (f) Perform complete reconciliations of all outstanding obligations monthly, and ensure any discrepancies identified are promptly researched and resolved.
Establish a thorough and robust quality control process to ensure that the Trust Obligation and Liability Model (TOLM) and Monthly Obligation and Liability Calculator (Calculator) are reviewed by qualified CNCS personnel prior to relying on its outputs to record transactions. All errors identified for which management ultimately decided against making updates to the TOLM or Calculator should be documented along with an explanation as to how management arrived at the final decision;
Perform monthly reviews and reconciliations of the recorded new and outstanding obligations to ensure the accounting information is valid and proper;
Review obligation amounts to ensure amounts accurately reflect the status of the obligation;
Review obligations to verify that amounts, timeframe (i.e., grant dates are correctly reflected in the obligation);
Ensure obligations are sufficiently supported (i.e., by documentary evidence); and
Perform complete reconciliations of all outstanding obligations monthly, and ensure any discrepancies identified are promptly researched and resolved. (repeat)
Coordinate with the Office of the Chief Risk Officer (OCRO) to properly identify the National Service Trust Fund’s financial reporting risks and incorporate those risks into the OCRO’s annual testing of key controls. (modified repeat)
Develop a succession plan to ensure the required expertise is available in anticipation of planned employee turnover, particularly with respect to the complex trust calculations. CNCS needs to: (a) Train, mentor, and work to retain qualified employees; (b) Cross-train employees so that knowledge of the model will reside with multiple staff rather than with one person; and (c) Implement a peer review process to carry out the necessary quality control reviews of the Trust Obligation and Liability Model and the Monthly Obligation and Liability Calculator.
Train, mentor, and work to retain qualified employees;
Cross-train employees so that knowledge of the model will reside with multiple staff rather than with one person; and
Implement a peer review process to carry out the necessary quality control reviews of the Trust Obligation and Liability Model and the Monthly Obligation and Liability Calculator. (repeat)
Implement all detailed recommendations in the FY 2019 FISMA Evaluation report. (repeat)