An oversight report found $1.9 billion in DHS transactions could not be linked to their corresponding award-level transactions for Q2 of FY2017, but the agency is pushing back on the findings.
Nearly $2 billion in financial transactions completed by the Department of Homeland Security could not be linked to their corresponding award-level transactions for Q2 of FY2017.
These misaligned transactions constituted about 38 percent of that quarter's total obligations, according to the DHS' inspector general. This was one of the data quality issues auditors found in their review of the department's compliance with the Digital Accountability and Transparency Act.
The OIG reported that DHS lacked sufficient controls over DATA Act submission processes, preventing the accurate, complete and timely submission of financial data. At the component level, agencies within DHS did not assess their internal controls over the accuracy of their DATA Act submissions. Specifically, auditors found the National Protection and Programs Directorate
and Federal Emergency Management Agency had "significant deficiencies" in the design and implementation of their data validation procedures.
Additionally, "despite its inability to align almost one quarter of its procurement obligations, DHS still certified that the data was accurate and complete," the report states. Auditors also reported that other spending data submissions lacked all the elements required by law.
In reply comments from oversight liaison Jim Crumpacker, DHS argued that OIG was applying accounting strictures not contained in the Data Act while ignoring flexibilities afforded to reporting agencies. DHS, he maintained, was comporting with the intent of the law.
"The reality is DHS can reconcile down to $230 million – within 5 percent of the total obligations – with the remaining amount largely attributable to governmentwide issues involving non-traceable costs related to inter-agency agreements, micropurchase transactions, financial system closeouts and other non-material low-risk transactions," Crumpacker wrote.
The comments also noted that the agency received plaudits from the Office of Management and Budget and Department of Treasury for the quality of its data and its commitment to Data Act implementation.
However, the auditors chided DHS for its component agencies' disparate financial systems, resulting in some spending data not being submitted in a timely fashion. OIG found that DHS's financial systems of record are not effectively integrated with procurement assistance systems, which risks adversely impacting data quality. The IG maintained that almost 64 percent of the 385 procurement and award transactions during the second quarter of fiscal year 2017 that were tested contained inaccurate data. OIG stated a sample transaction was deemed inaccurate if "any one of the data attributes we tested did not match to the agency's underlying records."
"We recognize that some misalignments among DHS' spending data may be due to legitimate reasons associated with existing business processes," the report states, "but we are concerned that timing differences 30 days or longer may not be legitimate."
OIG recommended that DHS's CFO strengthen the department's internal controls to make sure spending data files are aligned and verify which data errors are due to legitimate timing issues, and to verify that NPPD's DATA Act validation procedures have been finalized.
OIG also recommended DHS to develop quarterly performance metrics that measure the number and total value of misaligned transactions that cannot be traced to award files, a way to correctly assign program activity names and codes to ensure complete data, as well as a control process that ensures all changes made to data entries are appropriately approved and recorded.
Lastly, OIG recommended DHS incorporate DATA Act-specific controls into existing management processes at both the departmental and component levels.
DHS disagreed with OIG's recommendation that it needs to strengthen its data controls, arguing auditors did not take into account acceptable reasons for timing discrepancies, like systems limitations.