Audit of the Corporation for National and Community Service’s (CNCS) Fiscal Year 2018 Consolidated Financial Statements
Open Recommendations
The process to determine and document CNCS’s balance fluctuation expectations should be based on a combination of internal and external operating factors, and program and financial relevant information available.
Pending since FY 2017
The materiality threshold used to determine significant balance fluctuations that require further research should be more conservative than that used by external auditors and consistent with the materiality thresholds used by the OCRO (as part of the OCRO’s OMB Circular No. A‐123 assessment) to ensure integration and consistency between AFMS and OCRO.
Pending since FY 2017
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.
Pending since FY 2017
Research and retain supporting documents required for any identified account balance differences derived from its abnormal balance review or the tie point analysis.
Pending since FY 2017
Address fatal and non‐fatal Government wide Treasury Account Symbol Trial Balance (GTAS) edit failures.
Pending since FY 2017
Address all balance differences and retain supporting documentation of related research.
Pending since FY 2017
Develop a plan to upgrade its financial system to include OC codes which should be associated with USSGL in accordance with OMB Circular No. A‐11.
Pending since FY 2017
Provide mandatory training to CNCS accounting staff on the proper use of OC, sub general ledger accounts, and document/transaction types on all obligation and expense transactions.
tracking the sequence of SVs for completeness;
appropriate use of SVs;
determining and maintaining relevant documentation to support each SV;
use of specific and accurate SV descriptions;
timely review and approval of SVs; and
review obligations to verify that amounts, timeframe (i.e., grant dates are correctly reflected in the obligation) and age are accurately reflected in the status of the obligation to confirm their validity;
Pending since FY 2017
ensure obligations are sufficiently supported (i.e., by documentary evidence);
Pending since FY 2017
perform complete reconciliations of all outstanding obligations monthly, and ensure any discrepancies identified are promptly researched and resolved.
Pending since FY 2017
Develop a succession plan to ensure the required expertise is available in the event of employee turnover. Such succession planning is key to helping CNCS continue achieving its internal and external reporting objectives. CNCS needs to:
Pending since FY 2017
Train, mentor, and work to retain qualified employees;
Pending since FY 2017
Institute continued cross‐training so that knowledge of the model will reside with multiple staff rather than with one person; and
Pending since FY 2017
Implement a peer review process to carry out the necessary quality control reviews of the TSAL model.
Pending since FY 2017
Strengthen controls to ensure the TSAL modelling is performed by trained personnel to:
Conduct detailed analysis and validation of data sources;
Review and ensure the reasonableness of assumptions used and document the rationale behind these 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.
Coordinate with the program and grant officers to gather and analyze key grant programs’ (AmeriCorps State and National and Senior Corps) historical data and the grantees’ spending pattern to develop factors relevant for grant accrual estimation.
Pending since FY 2017
Centralize storage of all procurement documents in contract files and maintain them electronically.
Strengthen internal control to ensure procurement documents are properly approved and retained.
Analyze procurement UDO balances quarterly to verify that balances are still valid for those without financial activities for an extended period.
Research, resolve and document the disposition of any abnormal UDO transactions/balances.
Correct the financial system’s posting logic to ensure all future transactions are recorded properly in accordance with USSGL.
Develop, document and implement an accounts payable accrual methodology to include the recognition and reporting of the IBNR. The methodology should also document key controls related to review and approval process of the accrual estimation.
Pending since FY 2017
Conduct validation assessment of amounts accrued for the IBNR on a periodic basis. As part of the validation, CNCS should consider the following:
Subsequent activities against the amount estimated to determine the level of precision in the estimation;
Trend the validation results and adjust the IBNR estimation process to address any recurring significant fluctuations; and
Update the IBNR estimation process as necessary to reflect changes in payment patterns.
Analyze contractor‐developed‐software costs that were expensed but not capitalized in accordance with accounting standards. CNCS should record appropriate adjustments to correct the IUS balance based on its analysis.
Update CNCS policy to recognize and record capitalized costs during the period they are incurred.
Determine the root causes and resolve discrepancies in the grant award amounts recorded in the NGA in eGrants and in Momentum to prevent such differences from occurring in future.
Determine the root causes and resolve expenditure differences between PMS and Momentum.
All financial, performance and other required reports are submitted no later than 90 calendar days after the end date of the period of performance.
Document justifications for all required reports submission extensions granted to the grantee.
Update the CNCS transaction code posting logic for recording grant expenditures to comply with the USSGL guidance.
Require the program and grant officers who perform the grant close‐out in Momentum to certify that all required grantee information has been received and reviewed; and any final notices or changes to grant funding have been communicated and accepted by grantees. The process should require a second‐level of review before grants are closed‐out. All supporting documents should also be made readily available for review.
Reconcile the amounts reported in Other Liabilities to supporting documents to verify that Other Liabilities is supported by valid transactions and properly classified.
Develop a financial reporting checklist to ensure completeness and recording of all transactions.
Develop a multi‐year strategy to better strategically prioritize and allocate resources to address the new and continuing weaknesses identified and work towards automation, continuous monitoring and consistent application of controls.
Enforce the agency‐wide information security program across the enterprise and improve performance monitoring to ensure controls are operating as intended at all facilities.
Pending since FY 2017
Strengthen and refine the process for communicating CNCS facility specific control deficiencies to CNCS facility personnel, and coordinate remediation of the control deficiencies.
Pending since FY 2017
Strengthen and refine the process for holding system owners and information system security officers accountable for remediation of control deficiencies and ensuring that the appropriate security posture is maintained for CNCS information systems.
Pending since FY 2017