Thursday, June 12, 2008
The Transportation Security Administration, because of weak accounting practices, is unable to provide documentation to back up $585 million listed in its financial documents, according to an independent audit released this week.
The report by KPMG LLP, a private international accounting firm, also found that TSA is not "consistently" conducting background checks on employees and contractors who provide security to information technology at the U.S. Coast Guard's financial center - which does TSA's accounting work - and that it gives employees too much access to the computer systems immediately after employment.
"TSA was unable to provide sufficient audit evidence to support the accuracy, completeness and existence of accrued unfunded leave" and other financial categories, according to the report.
Released by the Department of Homeland Security's Office of Inspector General, the report said the unsubstantiated TSA money included $351 million in accounts payable, $142 million in employee leave documentation and $92 million in financial transactions with other government agencies.
The report, among its other findings, also pointed to security lapses between the Coast Guard and its computer software vendors, in which the Coast Guard doesn't require certain security measures, such as secure passwords.
KPMG also found that TSA doesn't keep adequate records to document employees' leave time or how it measures its property purchases and depreciation.
TSA declined on Wednesday to elaborate specifically on the report. But it did say it's working on fixing the errors.
"We fully concur with KPMG's findings and are taking aggressive action to implement the recommendations provided in the report," David R. Nicholson, assistant administrator and chief financial officer at TSA, wrote in a letter to the DHS Inspector General Richard L. Skinner in response to the report.
TSA was formed immediately following the Sept. 11, 2001, attacks as a component of the DHS. With 50,000 employees from Alaska to Puerto Rico, it is responsible for security of the nation's transportation systems. With its state, local and regional partners, it oversees security for highways, railroads, buses, mass transit systems, ports and 450 U.S. airports.
Mr. Skinner's office oversees an annual inspection of the agencies' financial records by an outside accounting firm. The KPMG report was released earlier this week.
In February, Mr. Skinner told the House Homeland Security Committee that financial management had been "a major challenge" for DHS since its creation in 2003 and that an audit in 2007 showed that "numerous material internal control weaknesses continued to be reported."
To move forward, he said, DHS had to develop a "comprehensive financial management strategy that addresses organizational resources and capabilities, inconsistent and flawed business processes and unreliable financial systems."
Mr. Skinner also noted that DHS took the initial step in correcting the problems in 2006 by preparing corrective action plans to address known internal control weaknesses. The corrective action plans from each component, he said, were incorporated into a single management strategy document identified as the Internal Control Over Financial Reporting playbook.
But he told the congressional panel that while the corrective action plans had "started to show results in improving financial reporting ... the department still has much work remaining."