[Independent Auditors Report on the Bureau of Indian Affairs Financial Statements for Fiscal Year 2000 (No. 01-I-385)]
[From the U.S. Government Printing Office, www.gpo.gov]

Report No. 01-I-385

Title: Independent Auditors Report on the Bureau of Indian Affairs
       Financial Statements for Fiscal Year 2000

 
Date:  May 11, 2001

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May 11, 2001

Memorandum

To:  Assistant Secretary for Indian Affairs

Subject:  Independent Auditors Report on the Bureau of Indian Affairs Financial Statements for Fiscal Year 2000 (No. 01-I-385)

We found that the Bureau of Indian Affairs' (BIA) principal financial statements1 for fiscal year 2000 were fairly presented in all material respects.  Our tests of BIA's internal controls, however, identified material weaknesses, reportable conditions, and stewardship and performance measure reporting issues.  In addition, our tests of BIA's compliance with applicable laws and regulations identified several areas of noncompliance.  Our detailed findings are in the attached independent auditors report.  

Internal Controls

Material Weaknesses.  We found that internal control deficiencies constituted material weaknesses in the following areas:  construction-in-progress account; property, plant, and equipment accounts; budgetary accounts; financial information integrity reviews, financial systems and reporting, year-end accruals, and automated information systems.  

>	Construction-In-Progress Account.  BIA did not include all valid projects and related costs in its construction-in-progress account, timely transfer completed projects to the appropriate fixed asset accounts, or remove invalid projects and related costs from the account.  

>	Property, Plant, and Equipment Accounts.  BIA did not adequately and completely inventory its property, plant, and equipment; timely and accurately record acquisitions and disposals; maintain adequate supporting documentation; timely transfer completed projects to the appropriate account; timely and accurately record depreciation expense; or timely identify and correct errors in its Fixed Asset Subsystem.  

>	Budgetary Accounts.  BIA did not accurately record or support budgetary account transactions, timely deobligate (clear) completed or inactive budgetary account transactions, or properly record and adequately support budgetary account adjustments.  

>	Financial Information Integrity Reviews.  BIA did not ensure that financial information integrity reviews timely identified and corrected errors and invalid transactions.   

>	Financial Systems and Reporting.  BIA did not develop effective financial system and reporting processes to ensure the review, analysis, and reconciliation of information in its financial systems and reports on a timely basis throughout the fiscal year.

>	Year End Accruals.  BIA did not develop a process to identify and record year-end accruals for expenditures for goods or services received but not paid as of September 30, 2000.   

>	Automated Information Systems.  BIA did not ensure that controls over its Operations Service Center automated information systems complied with Office of Management and Budget Bulletin 98-08 or correct the general control weaknesses identified in our April 1997 and June 1998 audit reports.2  

Reportable Conditions.  In addition to these material weaknesses, we believe that deficiencies identified in two accounts, in deferred maintenance management and reporting, and in stewardship and performance measure reporting were reportable conditions. 

>	Accounts And Interest Receivable and Related Advance Accounts.  BIA did not ensure that all receivable and related advance balances were adequately supported, valid, accurate, and properly classified and receivable transactions were timely entered in the appropriate general and subsidiary ledgers.   

* Deferred Maintenance Management and Reporting.  BIA did not conduct periodic condition assessment surveys on an accurate and/or consistent basis to estimate deferred maintenance needs for property, plant, and equipment.  

* Stewardship and Performance Measures.  BIA did not implement stewardship and performance measure management systems, as required by federal accounting standards and the Government Performance and Results Act. 


Compliance With Laws and Regulations 

Our testing of BIA's compliance with laws and regulations identified six instances of noncompliance.     

>	BIA's financial management system did not fully comply with the Chief Financial Officers Act of 1990 because there was no assurance that the information in its financial reports and systems was always complete, reliable, timely, and consistent.  

>	BIA did not timely transfer all accounts receivable delinquent for more than 180 days to the U.S. Treasury for collection or offset, as required by the Debt Collection Improvement Act of 1996.  

>	BIA did not comply with all requirements of OMB Circular A-11 relating to downward adjustments for loan subsidy re-estimates.

>	BIA's Prompt Payment Report, required by the Prompt Payment Act, was not acceptable because of the number of payment processing errors found.

>	BIA's general controls over its automated financial management information systems and BIA's National Irrigation Information Management System did not fully comply with the Federal Financial Management Improvement Act of 1996. 

>	BIA did not develop managerial cost accounting systems that adequately captured all elements necessary for assigning indirect costs on a reasonable basis.  

We made 10 recommendations addressing the material weaknesses, reportable conditions, and stewardship and performance measure reporting issues identified during our tests of BIA's internal controls and 1 recommendation addressing BIA's compliance with laws and regulations.  BIA concurred with all 11 recommendations.  Based on BIA's April 9, 2001 response, we consider the recommendations resolved but not implemented.  The recommendations will be referred to the Assistant Secretary for Policy, Management and Budget for tracking of implementation.  Since the recommendations are considered resolved, you do not need to respond further to us (see Appendix 3 of the attached Independent Auditors Report).  

Section 5(a) of the Inspector General Act (5 U.S.C. app. 3) requires us to list this report in our semiannual report to Congress.  In addition, we provide audit reports to Congress.  The attached Independent Auditors Report is intended for the information of management of the Department of Interior and OMB and the Congress.  The report, however, is a matter of public record, and its distribution is not limited.  



Roger La Rouche
Assistant Inspector General
for Audits

Attachment:
Independent Auditors Report

[CONTACT THE BUREAU OF INDIAN AFFAIRS FOR INFORMATION ON ITS FINANCIAL STATEMENTS FOR FISCAL YEAR 2000, WHICH ARE NOT INCLUDED.]

1BIA's principal financial statements consist of the Consolidated Statement of Financial Position as of September 30, 2000; the Consolidated Statement of Net Cost and Consolidated Statement of Change in Net Position for the fiscal year ended September 30, 2000; and the Combined Statements of Budgetary Resources and Financing for the fiscal year ended September 30, 2000.   
2 Our April 1997 audit report (No. 97-I-771) was entitled "General Controls Over Automated Information Systems, Operations Service Center, Bureau of Indian Affairs" and our June 1998 report (No. 98-I-483) was entitled "Followup of General Controls Over Automated Information Systems, Operations Service Center, Bureau of Indian Affairs."  (See Appendix 2 of the attached Independent Auditors Report.)



Independent Auditors Report 
Bureau of Indian Affairs 
Financial Statements 
Fiscal Year 2000 

We have audited the Bureau of Indian Affairs' (BIA) principal financial statements for the fiscal year ended September 30, 2000.  BIA's principal financial statements consist of the Consolidated Statement of Financial Position as of September 30, 2000; the Consolidated Statement of Net Cost and Consolidated Statement of Change in Net Position for the fiscal year ended September 30, 2000; and the Combined Statement of Budgetary Resources and the Combined Statement of Financing for the fiscal year ended September 30, 2000.  These financial statements are the responsibility of BIA, and our responsibility is to express an opinion, based on our audit, on these principal financial statements.

Our audit was conducted in accordance with generally accepted auditing standards;  "Government Auditing Standards," issued by the Comptroller General of the United States; and Office of Management and Budget (OMB) Bulletin 01-02, "Audit Requirements for Federal Financial Statements."  These standards require that we plan and perform the audit to obtain reasonable assurance as to whether the accompanying principal financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures contained in the principal financial statements and the accompanying notes.  An audit also includes assessing the accounting principles used and the significant estimates made by management, as well as evaluating the overall financial statement presentation.  

We believe that our audit work provides a reasonable basis for our opinion.  The objective, scope, and methodology of our work are discussed in Appendix 1.  Previous Office of Inspector General reports with significant unresolved or unimplemented recommendations related to BIA's financial statements or internal controls are summarized in Appendix 2.



Opinion on Principal Financial Statements


In our opinion, the principal financial statements audited by us and appearing on pages IV-1 to IV-6 present fairly, in all material respects, the financial position of BIA as of September 30, 2000 and its consolidated net cost, changes in net position, budgetary resources, and financing activities for the fiscal year ended September 30, 2000 in conformity with generally accepted accounting principles. 

Our audit was conducted to form an opinion on the principal financial statements taken as a whole, and our opinion relates only to the principal financial statements.  The supplemental financial and management information contained in BIA's Annual Report is presented for additional analysis and is not a required part of the principal financial statements, but is supplementary information required by the Federal Accounting Standards Advisory Board or OMB Bulletin 97-01, "Form and Content of Agency Financial Statements," as amended.  We applied certain limited procedures, including discussions with management, on the methods of measurement and presentation of this information to ensure compliance with OMB guidance and consistency with the financial statements.  We found that the information presented in the management discussion and analysis section and the supplementary information of BIA's Annual Report for fiscal year 2000 was consistent with the principal financial statements.  This information, however, has not been subjected to the auditing procedures applied in our audit of the principal financial statements, and accordingly, we express no opinion on it.  
Report on Internal Controls


Our audit was conducted in accordance with generally accepted auditing standards, "Government Auditing Standards," issued by the Comptroller General of the United States, and OMB Bulletin 01-02.  In planning and performing our audit, we obtained an understanding of BIA's internal controls to determine whether the controls had been placed in operation.  We also assessed control risks and tested the controls to determine our auditing procedures to express an opinion on the principal financial statements.  We limited our internal control testing to the controls necessary to achieve the objectives described in OMB Bulletin 01-02. We did not test all internal controls relevant to operating objectives as broadly defined by the Federal Managers' Financial Integrity Act of 1982.  The objective of our audit was not to provide assurance on internal controls, and we therefore do not provide an opinion on the internal controls.  

Our consideration of the internal controls over financial reporting would not necessarily disclose all matters in the internal controls over financial reporting that might be reportable conditions.  Under standards issued by the American Institute of Certified Public Accountants, reportable conditions are matters coming to our attention relating to significant deficiencies in the design or operation of the internal controls that, in our judgment, could adversely affect BIA's ability to record, process, summarize, and report financial data consistent with the assertions made by management in the financial statements.  Material weaknesses are reportable conditions in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions.  Because of inherent limitations in internal controls, misstatements, losses, or noncompliance may nevertheless occur and not be detected.  


Material Weaknesses

Our review identified the seven internal control deficiencies that we believe constituted material weaknesses.  The deficiencies are as follows:   

A.  BIA Needs Improved Controls Over Construction-in-Progress Account
BIA did not develop adequate policies and procedures to ensure the inclusion of all valid projects and related costs in its construction-in-progress (CIP) general ledger control account and subsidiary ledger, the timely transfer of completed projects to the appropriate fixed asset accounts, or the removal of invalid projects and project costs from the account and subsidiary ledger.

BIA did not develop adequate policies and procedures to ensure the inclusion of all valid projects and related costs in its construction-in-progress (CIP) general ledger control account and subsidiary ledger, the timely transfer of completed projects to the appropriate fixed asset accounts, or the removal of invalid projects and project costs from the account and subsidiary ledger.

Our audit tests disclosed aggregate errors of $44.5 million, requiring a net adjustment of $1.1 million, as shown in the following examples.  When informed of deficiencies in the construction-in-progress account, BIA made the necessary adjustments.

* BIA did not identify and record at least 16 valid construction projects totaling $11 million; record project costs of at least $8.3 million related to 10 construction projects; or transfer 10 completed construction projects totaling $10.2 million to the appropriate fixed asset accounts.

* BIA did not timely identify and remove invalid project costs of $12.6 million for eight projects or timely identify and remove negative project balances of $2.4 million for five projects.

Recommendation:  We recommend that the Chief Financial Officer establish and implement policies and procedures to ensure that all projects and related costs are included in the CIP account, completed projects are timely transferred to the appropriate fixed asset accounts, and invalid projects and project costs are identified and removed from the CIP account.

BIA Response:  BIA concurred and stated that it has made significant progress establishing internal control policies and procedures for CIP transactions.  BIA also conducted training for all appropriate field personnel in June 2000. It will also reinforce the need to follow established policies and procedures and provide additional training to the appropriate staff.  BIA is still rebuilding its accounting staff after the functional transfer from Albuquerque, New Mexico, to Reston, Virginia.  This staff will provide the primary oversight and technical expertise to ensure timely and correct recording in the accounting records.

B.  BIA Needs Improved Controls Over Property, Plant and Equipment
BIA did not develop and implement policies and procedures to ensure that its property, plant, and equipment accounts were stated in accordance with federal accounting standards.  Specifically, BIA did not adequately inventory its property, plant, and equipment; timely and accurately record acquisitions and disposals; maintain adequate supporting documentation; timely transfer completed projects to the appropriate account; timely and accurately record depreciation expense; or timely identify and correct errors in its Fixed Asset Subsystem.   

Our testing of BIA's subsidiary ledgers for property, plant, and equipment as of June 30 and September 30, 2000 disclosed absolute errors for acquisition costs totaling $180.2 million; accumulated depreciation costs totaling $36.7 million; and depreciation expenses totaling $53.8 million.  BIA made the adjustments necessary to correct the majority of the deficiencies in its subsidiary ledgers.  Examples of deficiencies are as follows:

* BIA did not record irrigation structures totaling $60.6 million for a BIA-operated irrigation project in the other structures and facilities subsidiary ledger that were improperly deleted from the Fixed Asset Subsystem in fiscal year 1999.  BIA also did not record in the other structures and facilities subsidiary ledger, fishing access sites constructed by the U.S. Army Corps of Engineers for $15.8 million and transferred to BIA during fiscal years 1997 through 2000.  

* BIA did not timely transfer completed construction project costs totaling $10.2 million for nine buildings and one power structure from the CIP account to the buildings and other structures accounts.

* BIA improperly disposed of buildings with acquisition costs of $19 million at one school location without obtaining proper acceptance of transfer from the tribe.  The building disposals were subsequently reversed.  BIA also did not timely record disposals of three equipment items totaling $53,100 and improperly disposed of three equipment items, resulting in a $28,000 understatement of the equipment account.

* A BIA agency did not record costs of $1.2 million for four buildings in the buildings subsidiary ledger.

* BIA recorded eight buildings with zero useful life, understating the accumulated depreciation and depreciation expense accounts by $4.8 million.  BIA recorded inaccurate in-service dates for 10 equipment items, resulting in errors of $53,600 for the accumulated depreciation account.

* BIA recorded (1) depreciation expense for 164 fully depreciated fixed asset items, requiring a downward adjustment of $11.5 million to the depreciation expense account, and (2) a negative depreciation expense for one building, requiring an upward adjustment of $8.6 million to the depreciation expense account.

* BIA field offices did not record 31 equipment items totaling $499,500 in the equipment subsidiary ledger and could not locate 9 recorded equipment items totaling $110,500.  

* BIA's equipment subsidiary ledger was understated by at least $20,600 related to three equipment items because the Fixed Asset Subsystem was expenditure linked and did not capture trade-in allowances for equipment items.  By not considering trade-in allowances, BIA may have undervalued or not properly capitalized items.  

* BIA recorded two equipment items with an in-service date of 9/10/99 in the Fixed Asset Subsystem at zero cost.  The items were referenced to an incorrect obligation document, and actual costs of $10,800 were consequently not posted to the items in the Fixed Asset Subsystem.

Recommendation:  We recommend that the Chief Financial Officer establish and implement policies and procedures to ensure that physical inventories of property, plant, and equipment are accurate and complete; acquisitions and disposals are timely and accurately recorded; adequate supporting documentation is maintained; completed construction projects are timely transferred to the appropriate accounts; depreciation expense is timely and accurately recorded; and errors in the Fixed Asset Subsystem are timely identified and corrected.

BIA Response:  BIA concurred and stated that it had strengthened its annual inventory and certification process for personal and real property.  In addition to providing training to all accountable property officers and accounting personnel, BIA is currently conducting a complete physical inventory and reconciliation to the accounting records.  BIA has also developed various reports to assist in monitoring and reconciling exceptions, depreciation, additions and deletions to the property accounts.  In addition, BIA has identified Federal Financial System (FFS) processing errors and is working with the software vendor to correct these problems.

C.  BIA Needs Improved Controls Over Budgetary Accounts
BIA did not develop and implement policies and procedures to ensure that transactions were timely deobligated (cleared) when completed or inactive, accurately recorded, and adequately supported in accordance with federal accounting standards.  BIA also did not develop and implement policies and procedures to ensure that adjustments made to Hyperion1 and FACTS II trial balance information were properly recorded and adequately supported.  Our audit revealed the following deficiencies:

* We tested 22 journal vouchers related to budgetary accounts totaling about $322 million and found errors and/or unsupported entries for 13 vouchers totaling about $41 million.

* We tested 105 items and found obligation transactions of $8.7 million that should have been deobligated before September 30, 2000.  In addition, BIA obligated one transaction of $166,000 after the expenditures were incurred and could not support another transaction of $800.  

* BIA made unsupported adjustments to align budgetary and proprietary accounts and to comply with the FACTS II system edit restrictions without adequately researching the cause for the out-of-balance condition.  

Recommendation:  We recommend that the Chief Financial Officer establish and implement policies and procedures to ensure that (1) budgetary account transactions are timely deobligated when completed or inactive, accurately recorded, and adequately supported; (2) adjusted differences between the Hyperion and FACTS II accounting systems are reconciled and documented; and (3) year-end adjustments are reviewed to determine whether the number and complexity of adjustments can be limited to minimum necessary levels.  These procedures should include necessary system changes and provide for periodic review and correction of budgetary account balances throughout the fiscal year.  

BIA Response:  BIA concurred and will provide written policies, procedures, and guidelines for use in reviewing and adjusting unliquidated obligations.  BIA will also ensure that these and other adjustments (for example, Hyperion and FACTS II) are entered and reconciled on a timely basis and that all adjustments and reconciliations are properly researched and documented.

D.  BIA Needs Improved Controls Over Financial Information Integrity Reviews
BIA did not develop and implement a financial information integrity review, reconciliation, and correction process that ensured the timely identification and correction of errors and invalid transactions in its general and subsidiary ledgers, listings, and reports at September 30, 2000.  The deficiencies included the following:

* BIA did not adequately reconcile balances reported on the Treasury Report on Receivables Due from the Public (Receivable Report) to its related general ledger accounts or ensure that all reported balances were adequately supported.  Specifically, the ending accounts receivable balance reported on the Receivable Report did not agree to related general ledger accounts by about $10.6 million.  In addition, about $8.8 million in loans reported as being referred to the Treasury Offset Program was not supported.

* BIA did not ensure that its financial system data accurately reflected the proper government or nongovernment attribute, as required by OMB Bulletin 97-01.

* BIA did not timely clear and/or reconcile transactions from the deposit suspense liability account.  

* BIA did not perform adequate reviews to ensure that all information reported in the Management Discussion & Analysis section of its Annual Report was consistent with similar information reported in the Principal Financial Statements and Required Supplemental Stewardship Information.

* BIA did not perform reviews to identify misstatements and presentation errors related to line item balances and notes for the financial statements.  Loans and interest receivable of $77.3 million, reported in BIA's draft financial statements, was overstated by $12.4 million.  In addition, the total loans receivable in Note 6 was forced to match the financial statement balance and did not tie to the net total loans receivable recorded for all funds.  Further, the net receivable - public balance of $13.1 million reported in Note 4 did not agree to the recorded financial statement line item balance of $19.1 million.  When informed of these deficiencies, BIA made the necessary corrections.

* BIA did not have adequate reviews in place to prevent duplicated costs of $5.1 million from being reported for environmental cleanup liabilities and deferred maintenance supplementary information.

Recommendation:  We recommend that the Chief Financial Officer establish and implement the controls necessary to ensure that adjusting journal/accounting entries are properly recorded in the appropriate general ledger control accounts and that financial information integrity reviews, reconciliations, and corrections are performed to ensure the accuracy and reliability of reported financial information.

BIA Response:  BIA concurred and is preparing policies and procedures to ensure that adjusting journal/accounting entries are properly recorded in the appropriate general ledger control accounts.  BIA is also conducting financial information integrity reviews, reconciliations, and corrections to ensure that financial information is accurate and reliable.  In addition, only the Division of Accounting Management (DAM) will post adjusting journal/accounting entries into FFS and Hyperion.  DAM is centralizing FFS vendor table maintenance to ensure accuracy of trading partner data.


E.  BIA Needs Improved Controls Over Financial Systems and Reporting
BIA did not develop and implement policies and procedures that ensured the review, analysis, and reconciliation of information in its financial systems and reports on a timely basis throughout the year.  The process used to prepare the financial statements required numerous manual account adjustments.  We believe that the extent and magnitude of account adjustments required at year-end demonstrate that the controls in place during the fiscal year were not operating efficiently or effectively.  The deficiencies included the following:

* BIA did not accurately record transactions or analyze accounts on a timely basis to correct errors, resulting in adjustments of about $1.2 billion to beginning and ending budgetary account balances, of which $491 million related to FACTS II adjustments. 

* BIA did not ensure that reported balances of at least $85.4 million were proper, reasonable, or supported in its draft Statement of Financing.  For example, BIA did not adequately analyze its accounts receivable transactions to determine the amount of exchange revenue not associated with budgetary resources and consequently understated "Exchange Revenue Not in the Entity's Budget" by about $69.2 million.  When informed of these deficiencies, BIA made the necessary corrections.

* BIA reported a balance of $39 million in its general ledger account 4590 Apportionments-Unavailable, although existing FACTS II edit checks require reducing the account balance to zero at fiscal year end.  In addition, adjustments to the account resulted in an illogical debit balance.

* BIA improperly recorded $14.3 million related to subsidy re-estimates for loan guarantees in general ledger account 1399 (allowance for subsidy) rather than in general ledger account 2180 (estimated liability for loan guarantees).  BIA also did not record $14.3 million in adjustments to subsidy expense and financing sources to be transferred out related to its subsidy re-estimate for loan guarantees.  BIA also did not recognize approximately $464,000 in net expenses related to its subsidy re-estimate for direct loans.  When informed of these deficiencies, BIA made the necessary corrections. 
* 
BIA did not ensure that transactions with other trading partners were accurately recorded and/or reconciled to allow for the timely identification of inter-bureau elimination entries, as required by the U.S. Treasury Financial Manual.   

* BIA did not perform timely reviews of fiscal year 1999 accruals/financial statement adjustments to determine their impact on fiscal year 2000 financial data and assess the need for the timely reversal of such entries.

* BIA did not perform timely reconciliations of fiscal year 1999 ending balances and fiscal year 2000 beginning balances in Hyperion or fiscal year 2000 beginning balances between FFS and Hyperion.

* BIA did not have adequate controls to ensure that adjustments for illogical account balances were properly researched, documented, and accurately processed.  

* BIA did not perform complete and timely reviews of its financial accounting system posting models to ensure that equity and budgetary accounts by fund were always closed properly to provide for accurate general ledger account balances and facilitate timely account analyses and reconciliation.  For example, the losses/gains on disposition of assets did not close to the capitalized assets equity account.  As a result, an out-of-balance condition existed between the net book value of property accounts and the balance recorded in the capitalized assets equity account.

* BIA did not adequately review its Fixed Asset Subsystem and the related general ledger accounts, resulting in negative depreciation expenses and other depreciation expense errors for fully depreciated property items in the general ledger at year-end.

Recommendation:  We recommend that the Chief Financial Officer establish and implement the controls necessary to ensure that accounting staff (1) reconcile and analyze general ledger accounts throughout the fiscal year; (2) ensure that financial systems comply with federal financial system requirements, federal accounting standards, and the U.S. Standard General Ledger at the transaction level; (3) generate financial statements from the general ledger rather than from adjunct accounting systems; and (4) develop and implement year-end procedures to produce timely, accurate, and reliable financial statements.

BIA Response:  BIA concurred and as part of rebuilding DAM, has placed considerable emphasis on hiring qualified accountants to monitor, maintain and reconcile general and subsidiary ledger accounts.  BIA is reviewing and documenting beginning and ending balances; ensuring timely and accurate transaction posting; and reviewing FFS posting models to ensure accuracy.  BIA is also working with the Department on Hyperion changes to accommodate FACTS II requirements, improve general ledger reconciliation, and minimize year-end adjustments.

F.  BIA Needs Improved Controls Over Year-End Accruals
BIA did not establish and implement policies and procedures for estimating year-end accruals for expenditures representing goods or services received but not paid as of September 30, 2000.  Statement of Federal Financial Accounting Standards Number 5, "Accounting for Liabilities of the Federal Government," Sections 19, 22, and 23 requires that a liability and/or expense be recognized in the period it occurs.  

Our audit tests revealed that as of September 30, 2000 BIA had understated its account balances for expenses and liabilities by $77.9 million and its undelivered orders balance by $77.9 million.  When informed of these deficiencies, BIA made the necessary adjustments. 
 
Recommendation:  We recommend that the Chief Financial Officer establish and implement policies and procedures to ensure accurate year-end accruals, including proper posting to all affected general ledger accounts in conjunction with reclassifying the suspense account to avoid any duplicate expenditures.

BIA Response:  BIA concurred and in FY 2000, developed estimates and recorded accruals for goods and services received, but not paid.  BIA is also developing procedures to facilitate this process and ensure that necessary adjustments are made during the year-end close cycle.  In addition, BIA will conduct more field training to ensure the applicable finance staff understands the need for year-end accruals and the method of determining what and how much to accrue.  Finally, BIA is developing reporting and monitoring mechanisms to support year-end accruals.

G.  BIA Needs Improved General Controls Over Automated Information Systems
BIA controls over its Operations Service Center automated information systems did not comply with OMB Bulletin 
98-08, and BIA had not fully implemented the recommendations made in our April 1997 audit report "General Controls Over Automated Information Systems, Operations Service Center, Bureau of Indian Affairs" (No. 97-I-771) and our June 1998 report "Followup of General Controls Over Automated Information Systems, Operations Service Center, Bureau of Indian Affairs" (No. 98-I-483).  (See Appendix 2.)

Recommendation:  We recommend that the Chief Financial Officer develop and implement procedures to strengthen the reported internal control weaknesses over automated information systems.

BIA Response:  BIA concurred, and the Chief Information Officer and Chief Financial Officer will work together to address automated system security procedures.  This is a complex and resource-intensive process, but BIA is committed to improving overall security procedures.  BIA stated that the recent move of its Office of Information Resources Management from Albuquerque, New Mexico, to Reston, Virginia, should improve its ability to better manage its system security, as well as other information technology issues.

Reportable Conditions

We identified three reportable conditions, as summarized in the following paragraphs.  

H.  BIA Needs Improved Controls Over Accounts and Interest Receivable and Related Advance Accounts
BIA did not develop and implement adequate procedures to ensure that all recorded receivable balances were adequately supported; all recorded receivable balances and related advance balances were valid, accurate, and properly classified; and all receivable transactions were timely entered into the appropriate general and subsidiary ledgers.  Our audit tests revealed the following deficiencies:

* BIA did not support receivables of $774,000, resulting in a projected accounts receivable overstatement of about $2.5 million.

* BIA improperly recorded about $2.5 million in advances to the unbilled receivable account as credit balances, resulting in a $2.5 million likely understatement of both the net accounts and interest receivable and advances line items.

* BIA did not properly record a collection of $18,800 as of the date of our review, resulting in an overstatement of the accounts receivable balance.  When informed of the deficiency, BIA made the necessary corrections.

* Recommendation:  We recommend that the Chief Financial Officer establish and implement policies and procedures to ensure that adequate documentation is available to support all recorded receivable balances; all recorded receivable and related advance account balances are valid, accurate, and properly classified; and all receivable and collection transactions are timely entered into the appropriate general and subsidiary ledgers.

BIA Response:  BIA concurred and stated that it recognizes the need for ongoing account analysis, reconciliation and documented support at the transaction level.  BIA is developing procedures and training to ensure that all financial staff understand the requirements for adequate documentation of all financial transactions and will develop and implement procedures to ensure the accurate and timely recording of all transactions.  BIA is also reviewing the reconciliation processes based on an analysis of FY 2000 financial statement adjustments to identify areas for improvement and to streamline the reconciliation process.  In addition, BIA has taken steps to recruit additional staff to ensure adequate resources are available to complete accounting and reporting functions.

I.  BIA Needs Improved Controls Over Deferred Maintenance Management and Reporting
BIA did not establish formal policies and procedures for periodically assessing the condition of its assets and for computing, compiling, and reporting estimates of deferred maintenance.  BIA also needed stronger supervisory and monitoring controls over deferred maintenance to ensure that deferred maintenance estimates were accurate, complete, and supported by adequate documentation.2

Recommendation:  We recommend that the Chief Financial Officer establish and implement policies and procedures for conducting periodic condition assessment surveys and estimating deferred maintenance needs, including the requirement that the data and methodologies used to compute the estimate be documented, reviewed, and approved at the appropriate management levels.

BIA Response:  BIA concurred and stated that it is working on policies and procedures to identify and report deferred maintenance requirements.  This process will include condition assessment methodologies and periodic condition assessment surveys.  BIA has made some progress in this area and is also participating in the Department's 5-year capital planning process to improve facilities maintenance and construction planning.

J.  BIA Needs Improved Controls Over Stewardship & Performance Measure Reporting
BIA did not implement stewardship and performance measure management systems, as required by federal accounting standards and the Government Performance and Results Act.  BIA omitted the reporting of some assets and reported incomplete data on other assets, as shown in the following examples:  

* BIA did not report investments in nonfederal assets for expenses incurred for construction and renovation of facilities, purchases of equipment, and other improvements of physical assets for educational facilities and irrigation structures under contract and/or grant with tribal entities or owned by tribal entities.  Statement of Federal Financial Accounting Standards No. 8, "Supplementary Stewardship Reporting," requires that an annual investment in nonfederal assets be reported as supplementary stewardship information.

* BIA did not report stewardship land as required by Standard No. 8.  Our review of BIA's subsidiary report on stewardship land disclosed that BIA had 48,466 acres of stewardship land, including land related to grazing, agriculture, forest and wildlife.

* BIA acknowledged in its supplementary Stewardship Report that it had not identified/reported deferred maintenance estimates for stewardship and general property, plant, and equipment asset categories as required by Standard No. 8.  The Standard requires supplementary stewardship information to include deferred maintenance estimates related to the deteriorating condition of property, plant, and equipment.  In its deferred maintenance report, BIA identified deferred maintenance estimates of $940.4 million for education facilities and $408.9 million for dams, but did not identify the stewardship portion of these estimates.  

* The $500.6 million Human Capital Investment (Investment in Indian Education) reported for fiscal year 2000 was the obligated rather than the expended amount as required by Standard No. 8 (Section 94).  We requested documentation to support the reported statistics from the Office of Indian Education, but did not receive the documentation in sufficient time before the January 19, 2001 deadline to review the supplemental data included in the Stewardship Report.

* The $273.3 million shown in the Accomplishment Report for Fiscal Year 2000 Indian Reservation Roads and Bridge Program was the funded rather than the expended amount required by Standard No. 8 (Section 87).  The Accomplishment Report described program accomplishments as road construction and maintenance, but included information only on road construction accomplishments, which are funded by the Department of Transportation, and omitted information on road maintenance accomplishments, which are funded by BIA.  After our requests to provide the documentation used to generate the Accomplishment Report, BIA revised the Report to include an additional $37.7 million of construction program accomplishments and provided the supporting documentation.  We could not review the information included in the Report, however, because it was not provided before the January 19, 2001 deadline.  

Finally, with respect to internal controls related to performance measures reported in the Management Discussion and Analysis, we obtained an understanding of the design of the significant internal controls relating to the existence and completeness assertions, as required by OMB Bulletin 01-02.  Our procedures were not designed to provide assurance over internal controls for reported performance measures, and we therefore do not provide an opinion on such controls.  

We noted significant deficiencies in internal controls for reported performance measures, however, which could adversely affect BIA's ability to collect, process, record, and summarize performance information and reported performance measures in accordance with management criteria.  Specifically, BIA did not report all of its selected performance measure information in its Management and Discussion Analysis section, but chose to address performance measures in a supplementary schedule.  BIA did not identify target results for three performance measures because of incomplete data, and one performance measure was no longer applicable since BIA had received an unqualified opinion for fiscal year 1999. 

Recommendation:  We recommend that the Chief Financial Officer establish and implement stewardship and performance measure management systems that include the control procedures necessary to ensure the timeliness, completeness, reliability, and availability of stewardship and performance measure information, including all supporting documentation and listings.

BIA Response:  BIA concurred and will develop and issue policies and procedures to adequately address deferred maintenance estimates and account for its stewardship lands and investments in nonfederal property to ensure compliance with the Statement of Federal Financial Accounting Standards.  BIA will identify and include performance metrics in its performance plan to focus on this area of responsibility and institute field visits to various locations to validate performance reporting.  BIA will also institute a formal policy on the timelines for performance reporting that will coincide with the fiscal year reporting on the financial statements.


Report on Compliance With Laws and Regulations


We conducted our audit in accordance with generally accepted auditing standards, "Government Auditing Standards," issued by the Comptroller General of the United States, and OMB Bulletin 01-02.  BIA management is responsible for complying with applicable laws and regulations.  As part of obtaining reasonable assurance as to whether BIA's financial statements were free of material misstatement, we tested BIA's compliance with (1) certain provisions of laws and regulations that if not complied with could directly and materially affect the determination of financial statement amounts and (2) certain other laws and regulations specified in OMB Bulletin 01-02, including the requirements referenced in the Federal Financial Management Improvement Act of 1996 that we report on whether BIA's financial management systems substantially comply with federal financial management system requirements, applicable federal accounting standards, and the U.S. Government Standard General Ledger at the transaction level.  

We limited out tests of compliance to these provisions and did not test compliance with all laws and regulations applicable to BIA.  Providing an opinion on compliance with certain provisions of laws and regulations was not an objective of our audit, and we therefore do not express such an opinion.  

K. BIA Needs Improved Controls Over Compliance With Applicable Laws and Regulations 
The results of our tests of compliance with the laws and regulations disclosed instances of noncompliance with the following laws and regulations that are required to be reported under "Government Auditing Standards" and OMB Bulletin 01-02.  

* Chief Financial Officers Act of 1990.  BIA did not establish and implement general and financial management practices and improve its accounting and financial management systems and internal controls to ensure that the financial information in its financial reports and subsidiary ledgers was complete, reliable, timely, and consistent.   

* Debt Collection Improvement Act of 1996.  BIA did not timely transfer all eligible accounts receivable delinquent for more than 180 days to the U.S. Treasury for collection or offset.  Although BIA reported referral of delinquent accounts receivable of $7.6 million to the U.S. Treasury for collection or offset at September 30, 2000, we found additional delinquent accounts receivable of at least $6.8 million that were eligible for referral at September 30, 2000.  The Act requires referral of all eligible receivables delinquent for more than 180 days to the U.S. Treasury for collection or offset.  Eligible receivables are receivables that are not in bankruptcy, litigation, or foreclosure status and that have not been referred to a private collection agency or the Internal Revenue Service for tax refund offset.

* OMB Circular A-11, "Preparations and Submission of Budget Estimates."  BIA did not transfer its fiscal year 1999 downward re-estimate of subsidy cost for its guaranteed loan program to the related general fund receipt account established for guaranteed loans.  BIA also did not establish a general fund receipt account for downward re-estimates of subsidy cost for its direct loan program.  OMB Circular A-11 requires that a financing disbursement for a downward re-estimate of credit program subsidy cost be made from a financing account to a general fund receipt account established for each credit program.  

* Prompt Payment Act.  Our review of all fiscal year 2000 quality control quarterly reports disclosed that BIA made incorrect data entries into FFS, ranging from 15 to 30 percent for the items tested.  Quality control reviews prepared by the Chief, Accounting Operations Branch, National Business Center, for fiscal year 2000 stated that the accuracy of BIA's Prompt Payment Report was not acceptable because of the number of payment processing errors found.  The Prompt Payment Act requires that federal agencies pay their bills on time, pay interest penalties when payments are made late, and take discounts only when payments are made within the discount period and are advantageous to the Government.  

* The Federal Financial Management Improvement Act.  Our tests of compliance with Section 803(a) of the Act did not disclose any instances in which BIA did not substantially comply with the U.S. Standard General Ledger at the transaction level, but did reveal instances in which BIA's financial management system did not substantially comply with federal financial management system requirements and applicable federal accounting standards as follows.

* Financial System Requirements.  BIA's general controls over its automated information systems were ineffective and significantly departed from certain requirements of OMB Circulars A-127, "Financial Management Systems," and A-130, "Management of Federal Information Resources," indicating substantial noncompliance with requirements for federal financial management systems under the Federal Managers' Financial Integrity Act of 1982.  In addition, BIA's National Irrigation Information Management System (NIIMS), a subsidiary irrigation accounts receivable system, did not support the functions required to track financial events; provide information for preparing financial statements; or collect, transmit, and report data about financial events.  NIIMS also did not maintain sufficient information to distinguish between prior and current fiscal year transactions.  All bills entered into NIIMS during a current fiscal year were assigned a current fiscal year billing document number regardless of the actual fiscal year of the revenues being billed, resulting in an understatement of current year revenue in FFS if a bill were canceled and not reissued.  In addition, at the beginning of each fiscal year, NIIMS's electronic interface with FFS identified all irrigation receivables as current and did not allow for accurate aging and reporting of delinquent receivables from data within FFS.  The interface also did not distinguish between government and nongovernment receivables or allow other federal entities to be identified to provide accurate financial statement year-end eliminations.  

* Managerial Cost Accounting Management and Reporting.  BIA did not develop managerial cost accounting systems that captured all elements necessary for assigning indirect costs on a reasonable basis.  Specifically, BIA did not allocate indirect costs to its responsibility segments as of September 30, 2000.  For fiscal year 2000, BIA intermingled its indirect costs within the $345.8 million reported for expenses in the responsibility segment identified as Tribal Quality-Administration and Support Services.  In addition, BIA reported the fiscal year 2000 change in net position for its responsibility segments rather than the end of the year net position for segments on its Segment Report on Changes in Net Position.  We reviewed the managerial cost accounting processes in accordance with the full cost financial reporting requirements contained in Statement of Federal Financial Accounting Standards No. 4 and OMB Bulletin 97-01, as amended. 

Recommendation:  We recommend that the Chief Financial Officer develop and implement procedures that ensure compliance with the Chief Financial Officers Act of 1990, Debt Collection Improvement Act of 1996, OMB Circular A-11, Prompt Payment Act, and Federal Financial Management Improvement Act of 1996, including managerial cost accounting management and reporting requirements.

BIA Response:  BIA concurred and in FY 2000 hired a Chief Financial Officer to work with its Offices of Administration and Indian Education Programs, as well as other programs, to strengthen compliance with the Chief Financial Officers Act of 1990, Debt Collection Improvement Act of 1996, Office of Management and Budget Circular A-11, Prompt Payment Act, and Federal Financial Management Improvement Act of 1996, including managerial cost accounting management and reporting requirements.  The Chief Financial Officer has prepared a draft plan to improve overall financial management of BIA operations and programs.  In addition, BIA's referral of debt from its power and irrigation program to the U.S. Treasury in September 2000 was a major milestone in improving BIA's debt collection.

We made 10 recommendations addressing the material weaknesses, reportable conditions, and stewardship and performance measure reporting issues identified during our tests of BIA's internal controls and 1 recommendation addressing BIA's compliance with laws and regulations.  BIA concurred with all 11 recommendations.  Based on BIA's April 9, 2001 response, we consider the recommendations resolved but not implemented.  The recommendations will be referred to the Assistant Secretary for Policy, Management and Budget for tracking of implementation.  Since the recommendations are considered resolved, BIA does not need to respond further (see Appendix 3).  

Section 5(a) of the Inspector General Act (5 U.S.C. app. 3) requires us to list this report in our semiannual report to Congress.  In addition, we provide audit reports to Congress. 


The report is intended for the information of management of the Department of Interior, OMB and Congress.  The report, however, is a matter of public record, and its distribution is not limited.  




		Roger La Rouche
		Assistant Inspector General
		    for Audits


Appendix 1


Objective, Scope, and Methodology 

BIA management is responsible for the following:

* Preparing the principal financial statements and the required supplementary information in conformity with generally accepted accounting principles and other information contained in the Annual Report for fiscal year 2000.

* Establishing and maintaining an internal control structure over financial reporting.  In fulfilling this responsibility, BIA must estimate and judge the expected benefits and related costs of internal control structure policies and procedures.

* Complying with applicable laws and regulations.

* We are responsible for the following:

* Expressing an opinion on BIA's principal financial statements.

* Obtaining an understanding of the internal controls based on the internal control objectives in OMB Bulletin 01-02, which require that transactions be properly recorded, processed, and summarized so that the principal financial statements and the required supplementary information can be prepared in accordance with federal accounting standards; that assets be safeguarded against loss from unauthorized acquisition, use, or disposal; and that transactions and other data supporting reported performance measures be properly recorded, processed, and summarized so that performance information can be prepared in accordance with criteria stated by management.

* Testing BIA's compliance with selected provisions of laws and regulations that could materially affect the principal financial statements or the required supplementary information.

* To fulfill these responsibilities, we took the following actions:

* Examined, on a test basis, evidence supporting the amounts disclosed in the principal financial statements.

* Assessed the accounting principles used and the significant estimates made by management.

* Evaluated the overall presentation of the principal financial statements.

* Obtained an understanding of the internal control structure related to safeguarding assets; compliance with laws and regulations, including the execution of transactions in accordance with budget authority; financial reporting; and certain performance measure information reported in the annual report.

* Tested relevant internal controls over the safeguarding of assets; compliance with laws and regulations, including the execution of transactions in accordance with budget authority; and financial reporting.

* Tested compliance with selected provisions of laws and regulations.

We did not evaluate all of the internal controls related to the operating objectives as broadly defined by the Federal Managers' Financial Integrity Act, such as those controls related to preparing statistical reports and ensuring efficient operations.  We limited our internal control testing to those controls needed to achieve the objectives outlined in our report on internal controls.

Appendix 2


Prior Audit Coverage

Our review of prior Office of Inspector General and General Accounting Office audit reports related to BIA's financial statements did not disclose any General Accounting Office reports with significant unresolved or unimplemented recommendations related to BIA's financial statements or internal controls.  We did find nine Office of Inspector General reports, however, with significant unresolved or unimplemented recommendations that we considered to be material and/or reportable weaknesses as follows:   

* Our report "Independent Auditors Report on Bureau of Indian Affairs Financial Statements for Fiscal Year 1999" (No. 00-I-597), issued in July 2000, stated that the fiscal year 1999 principal financial statements were fairly presented in all material respects.  The report also stated, however, that BIA internal control deficiencies were considered material in the construction-in-progress account; property, plant, and equipment account; budgetary accounts; financial information integrity reviews; and automated information systems.  The report also stated that weaknesses in accounts and interest receivable and related revenue and allowance for doubtful accounts and deferred maintenance were reportable conditions.  In addition, BIA was not in compliance with the Chief Financial Officers Act of 1990, Federal Financial Management Improvement Act of 1996, Debt Collection Improvement Act of 1996, Prompt Payment Act, and managerial cost accounting management and reporting requirements.  As of September 30, 2000, BIA had implemented procedures to comply with two of the report's nine recommendations and had concurred with but had not implemented the remaining seven recommendations.

* The report "Bureau of Indian Affairs Consolidated Comparative Financial Statements for Fiscal Years 1998 and 1997" (No. 99-I-937), issued September 1999, stated that the fiscal year 1998 consolidated financial statements and accompanying notes were presented fairly except for the amounts reported in the financial statements for 13 accounts and the effect of these accounts on the overall net position, change in financial position, budgetary resources and outlays, and the related notes to the financial statements.  In addition, the report stated that BIA was not in compliance with the Chief Financial Officers Act of 1990, Federal Financial Management Improvement Act of 1996, Debt Collection Improvement Act of 1996, Credit Reform Act of 1990, and Prompt Payment Act.  As of September 30, 2000, BIA provided a response to resolve one of the 23 recommendations contained in the report, but had not implemented any of the recommendations.

* The report "Followup of General Controls Over Automated Information Systems, Operations Service Center, Bureau of Indian Affairs" (No. 98-I-483), issued in June 1998, stated that the weaknesses identified in our audit report for fiscal year 1996 still existed and made eight new recommendations.  As of September 30, 2000, BIA had implemented procedures relating to four recommendations and had concurred with but not implemented the remaining four recommendations related to (1) developing and approving a strategic plan defining the functions of the Center; (2) periodically evaluating Systems security effectiveness and including corrective actions in future BIA security plans; (3) determining when BIA could begin risk assessments and classification of BIA resources; and (4) obtaining security clearances for automated data personnel not assigned to the Center. 

* The report "Bureau of Indian Affairs Consolidated Financial Statements for Fiscal Years 1995 and 1996" (No. 97-I-834), issued in May 1997, stated that fiscal year 1996 consolidated financial statements and accompanying notes were presented fairly except for the amounts reported in the financial statements for four accounts and the effect of these accounts on the net position.  The report also stated that BIA was not in compliance with the Debt Collection Act of 1982.  As of September 30, 2000, BIA had implemented two of the report's three recommendations and had concurred with but not implemented the recommendation relating to monitoring transactions recorded in its accounting system.  

* The report "General Controls Over Automated Information Systems, Operations Service Center, Bureau of Indian Affairs" (No. 97-I-771), issued in April 1997, stated that BIA had not (1) ensured adequate Systems security, (2) determined the level of security needed, (3) monitored visitor activities and safeguarded computer hardware, (4) periodically reviewed user access levels, (5) ensured use of the proper version of an application in production, (6) segregated duties for Systems support functions, (7) developed Systems software controls to detect and deter inappropriate use, or (8) developed an effective means of recovering or continuing computer operations in the event of a Systems failure.  As of September 30, 2000, BIA had implemented procedures to address 6 of the report's 13 recommendations and had concurred with but not implemented 6 recommendations related to developing an adequate Systems security program and developing and implementing policies to classify BIA's computer resources in accordance with OMB Circular A-130 and periodically match personnel files with Systems users.  A followup audit report (No. 98-I-483) found that the remaining recommendation, related to moving the applications residing on the Unisys computer, was no longer applicable, and the recommendation was not referred for further tracking of implementation.
* The report "Direct and Guaranteed Loan Programs, Eastern Area Office, Bureau of Indian Affairs" (No. 97-I-504), issued in March 1997, stated that BIA's Eastern Area Office did not (1) screen and analyze loan applications for reasonable assurance of the borrower's ability to repay, (2) adequately monitor outstanding loans, (3) initiate debt collection activities when appropriate, or (4) adequately justify loan write-offs.  As of September 30, 2000, BIA had implemented procedures for five of the report's six recommendations and had concurred with but not implemented the recommendation related to complying with the Departmental Manual.  

* The report "Indian Irrigation Projects, Bureau of Indian Affairs" (No. 96-I-641), issued in March 1996, stated that BIA had not taken corrective actions to recover operation and maintenance charges of $3 million owed eight projects for fiscal years 1993 and 1994, collect reimbursable construction costs totaling $7.7 million from non-Indian landowners at five projects, and include reimbursable construction costs of about $3.3 million in repayment contracts for two irrigation projects.  As of September 30, 2000, BIA had concurred with but not implemented any of the report's 13 recommendations. 

* The report "Bureau of Indian Affairs Principal Financial Statements for Fiscal Years 1993 and 1994" (No. 95-I-598), issued in February 1995, stated that we were unable to complete the audit and render an opinion on the principal financial statements because BIA did not support the balances reported for accounts receivable and accounts payable and the fund balance with the U.S. Treasury for the irrigation and power accounts.  BIA also could not substantiate the amounts reported for real property, personal property, and construction-in-progress.  As of September 30, 2000, BIA had implemented procedures for four of the six recommendations in the report and had concurred with but not implemented the two recommendations related to (1) reconciling subsidiary ledger balances with appropriate general ledger accounts and (2) developing and implementing procedures to ensure that accounting activities related to the construction-in-progress account were properly coordinated, accurate and updated and that the amounts reported in BIA's general ledger accounts for five accounts (construction-in-progress; buildings; other structures and facilities; roads, bridges, and trails; and improvements to land) were properly coordinated, accurate, and updated.  

* The report "Wapato Irrigation Project, Bureau of Indian Affairs" (No. 95-I-1402), issued in September 1995, stated that the Wapato Project Office was not adequately assessing, billing, or collecting annual operation and maintenance charges.  As of September 30, 2000, BIA had implemented procedures for four of the six recommendations and had concurred with but not implemented the remaining two recommendations related to determining the full cost of operations and establishing reserve funds to rehabilitate the Project and replace facilities and equipment.  

Appendix 3


Status of Audit Report Recommendations 


Findings/Recommendation
Reference
Status
Action Required
A. B. C. D. E. F.
G. H. I. J. K.
Resolved; not implemented.

No further response to the Office of Inspector General is required.  We will forward the recommendations to the Assistant Secretary for Policy, Management and Budget for tracking of implementation.  Please provide the target dates and titles of the officials responsible for implementation to the Office of Financial Management

_________________________

1Hyperion is the software application used to prepare financial statements for the Department of the Interior and its agencies.
______________________

2Our review of the internal controls related to deferred maintenance was done in accordance with Statement of Federal Financial Accounting Standards No. 6, "Accounting for Property, Plant and Equipment," as amended by Statement of Federal Financial Accounting Standards No. 14, "Amendments to Deferred Maintenance Reporting."  We reviewed the internal controls related to transactions and other data that support the reported supplementary information on deferred maintenance to determine whether BIA estimates totaling $3.1 billion were properly supported, processed, and summarized. 





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