GAO report highlights financial reporting deficiencies at CFPB

foil.seal.gaoThe Government Accountability Office released a report last week that highlighted multiple deficiencies in the CFPB’s financial reporting controls.

The audit report for fiscal years 2013 and 2012 found the consumer protection agency failed to develop and implement controls over the year-end accrual process to ensure accounts payable were complete and accurate. The report also found the CFPB did not implement controls to ensure property and equipment transactions were properly recorded and accurate.

“These deficiencies increase the risk that CFPB may not detect and correct errors in time to prevent misstatement of the financial statements,” the report said. “GAO is making…recommendations that are intended to improve management’s oversight and controls in these areas and reduce the risk of misstatements in CFPB’s accounts and financial statements.”

The GAO recommended that the agency develop guidance and training for contracting officer representatives to help them identify and estimate accruals; design and implement controls to ensure property and equipment costs are recorded and accurate; require review of supporting documents to ensure expenses are tracked and recorded properly; and implement stronger controls related to account reviews.

“These recommendations are intended to improve CFPB’s oversight and controls in these areas as well as to bring CFPB into conformance with its own policies,” the report said, adding that the CFPB agreed with the recommendations.

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