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U.S. Environmental Protection Agency
Office of Inspector General
At a Glance
14-1-0039
December 16, 2013
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 theme:
• Embracing EPA as a high
performing organization.
For further information,
contact our public affairs office
at (202) 566-2391.
The full report is at:
www.epa.qov/oiq/reports/2014/
20131216-14-1-0039.pdf
Audit of EPA's Fiscal 2013 and 2012
Consolidated Financial Statements
EPA Receives an Unqualified Opinion
We rendered an unqualified opinion on the EPA's
Consolidated Financial Statements for fiscal 2013
and 2012, meaning that they were fairly presented
and free of material misstatement.
System weaknesses
could impact the
reliability of financial
information.
Internal Control Significant Deficiencies Noted
We noted the following significant deficiencies:
•	EPA overstated Superfund State Contract credits.
•	EPA's high number of accounting corrections indicates an internal control
weakness.
•	Internal controls over EPA's accountable personal property inventory
process need improvements.
•	Software was improperly recorded in Compass.
•	EPA needs to improve access control procedures for key financial
systems.
•	EPA needs to improve processes for following up on identified network
vulnerabilities.
Noncompliance With Laws and Regulations Noted
EPA's high number of accounting corrections indicates an internal weakness.
Recommendations and Planned Agency Corrective Actions
The agency agreed with most of our findings and recommendations. However,
the agency did not agree with our finding that the number of error corrections
were high, an internal control weakness and an instance of noncompliance with
the Federal Financial Management Improvement Act. The agency posted over
100 journal entries to correct posting model errors, and just one of those
entries involved 206 transactions. While we do not believe the noncompliance
rose to the level of substantial noncompliance, we consider the number of
errors at the transaction level to be high and an internal control weakness.

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