Audit of VA's Financial Statements for Fiscal Years 2015 and 2014

CliftonLarsonAllen LLP provided an unmodified opinion on VA’s financial statements for FYs 2015 and 2014 and identified four material weaknesses: information technology (IT) security controls; procurement, undelivered orders, and reconciliations; purchased care processing and reconciliations; and financial reporting. OIG contracted with the independent public accounting firm, CliftonLarsonAllen LLP, to audit VA’s fiscal year (FY) 2015 financial statements. This audit is an annual requirement of the Chief Financial Officers Act of 1990. CliftonLarsonAllen LLP also identified two significant deficiencies: accrued operating expenses and CFO organizational structure for VHA and VA. They also reported VA’s substantial noncompliance with applicable Federal financial management systems requirements and the United States Standard General Ledger at the transaction level under the Federal Financial Management Improvement Act (FFMIA). They noted improvements were needed in complying with the Federal Managers’ Financial Integrity Act. They cited instances of noncompliance with section 5315, title 38, United States Code, pertaining to the charging of interest and administrative costs, and three possible violations of the Antideficiency Act, with VA in the process of reporting two others. CliftonLarsonAllen LLP made recommendations regarding VA’s IT security controls, financial management processes, and financial management structure. Department officials expressed a firm commitment to addressing the material weaknesses and significant deficiencies. The independent auditors, will follow up on actions taken during the FY 2016 audit.