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U.S. Environmental Protection Agency
Office of Inspector General
At a Glance
17-F-0046
November 15, 2016
Why We Did This Review
We performed this audit in
accordance with the Government
Management Reform Act, which
requires the U.S. Environmental
Protection Agency (EPA) to
prepare, and the Office of
Inspector General to audit, the
agency's financial statements
each year. Our primary
objectives were to determine
whether:
•	EPA's consolidated financial
statements were fairly stated
in all material respects.
•	EPA's internal controls over
financial reporting were in
place.
•	EPA management complied
with applicable laws and
regulations.
The requirement for audited
financial statements was enacted
to help bring about improvements
in agencies' financial
management practices, systems
and controls so that timely,
reliable information is available
for managing federal programs.
This report addresses the
following EPA goal or
cross-agency strategy:
• Embracing EPA as a high-
performing organization.
Send all inquiries to our public
affairs office at (202) 566-2391
or www.epa.gov/oia.
Listing of OIG reports.
EPA's Fiscal Years 2016 and 2015
Consolidated Financial Statements
EPA Receives an Unmodified Opinion
We rendered an unmodified opinion on the
EPA's consolidated financial statements for
fiscal years 2016 and 2015, meaning they were
fairly presented and free of material
misstatement.
Internal Control Material Weaknesses and
Significant Deficiencies Noted
We noted the following material weaknesses:
•	EPA's accounting for software continues to be a material weakness.
•	EPA incorrectly recorded unearned revenue for Superfund special
accounts, and did not reconcile unearned revenue for those accounts.
We noted significant deficiencies involving:
•	EPA wrote off cash differences with Treasury without adequate support.
•	EPA did not clear suspense transactions timely.
•	EPA erroneously reclassified a real property capital lease.
•	EPA did not have controls to monitor direct access to the Compass
Financials database.
•	EPA did not have adequate documenting for restoring application controls
at the National Computer Center.
•	EPA needs to improve offsite storage of data backups.
Noncompliance With Laws and Regulations Noted
We found that the EPA did not comply with the Hazardous Waste Electronic
Manifest Establishment Act in that it used appropriated funds to cover contract
costs unrelated to the electronic manifest project.
Recommendations and Planned Agency Corrective Actions
The EPA agreed with our findings and recommendations except for a
recommendation to develop a process for obtaining the current inventory listing
and document the process in the National Computer Center's Disaster
Recovery Plan and Information System Contingency Plan. We consider the
recommendation unresolved pending the agency's response to the final report.
We found the EPA's
financial statements to be
fairly presented and free
of material misstatement.

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