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	 \ Office of Inspector General
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At a Glance
Why We Did This Audit
We performed this audit in
accordance with the Government
Management Reform Act of
1994, which requires the
U.S. Environmental Protection
Agency's Office of Inspector
General to audit the financial
statements prepared by the
Agency each year. Our primary
objectives were to determine
whether:
•	The EPA's consolidated
financial statements were
fairly stated in all material
respects.
•	The EPA's internal controls
over financial reporting were
in place.
•	EPA management complied
with applicable laws,
regulations, contracts, and
grant agreements.
The requirement for audited
financial statements was enacted
to help bring about improvements
in agencies' financial
management practices, systems,
and control so that timely,
reliable information is available
for managing federal programs.
This report addresses the
following:
•	Operating efficiently and
effectively.
This report addresses a top EPA
management challenge:
•	Fulfilling mandated reporting
requirements.
Address inquiries to our public
affairs office at (202) 566-2391 or
OIG WEBCOMMENTS@epa.gov.
EPA's Fiscal Years 2020 and 2019 (Restated)
Consolidated Financial Statements
EPA Receives an Unmodified Opinion for FYs 2020 and 2019
We rendered an unmodified opinion on the
EPA's consolidated financial statements for
fiscal years 2020 and 2019 (restated), meaning
they were fairly presented and free of material
misstatement.
We found the EPA's
financial statements to be
fairly presented and free
of material misstatement.
Significant Deficiencies Noted
We noted the following significant deficiencies:
•	The EPA continues to make misstatements and adjustment errors during its
consolidated financial statement and component financial statement
preparation processes.
•	The EPA improperly recorded adjustments totaling over $141 million of
unearned revenue.
Compliance with Laws, Regulations, Contracts, and Grant
Agreements	
We did not note any significant noncompliance with laws, regulations, contracts,
and grant agreements.
Recommendations and Planned Agency Corrective Actions
The EPA agreed with our recommendations but disagreed with some of the OIG
statements made about the first significant deficiency listed above. The EPA
disagreed that it was unable to detect errors and did not exercise due diligence.
The Agency also disagreed that it did not properly detect a $4 billion error. We
stand by our position that the lack of due diligence is evidenced by the errors
we found during this audit and that if the EPA had adequately prepared and
reviewed the adjustment, the error would not have been entered into the EPA's
accounting system.
List of OIG reports.

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