The Chief Financial Officers Act of 1990 requires the Inspector General to audit the agency’s financial statements each year, which is intended to help improve an agency’s financial management and controls over financial reporting.
For FY 2020, although the Department and FSA received unmodified opinions on their financial statements, the auditors identified a material weakness in the Department’s controls over the reliability of underlying data used in credit reform re-estimates of the subsidy costs of its student loan programs. The auditors also identified three significant deficiencies: one involving information technology controls; another involving its monitoring controls of an information technology servicer responsible for internal controls at a data center; and third, an entity-wide deficiency in its overall control environment. The auditors also found one instance of reportable noncompliance with Federal law related to referring delinquent student loan debts to the U.S. Department of the Treasury.
We made 16 recommendations, including that the Department and FSA strengthen the risk assessment process by considering the impact of IT control deficiencies on internal controls over the reliability of information in the Department’s IT systems, and design and implement additional controls over the completeness and accuracy of the underlining data used to develop the re-estimate.
Information Technology Security
See other OIG financial statement audits.