On November 8, 2017, we issued the results of our audit of the FDIC’s Compliance with the Digital Accountability and Transparency Act of 2014 (DATA Act). The purpose of the DATA Act is to expand the Federal Funding Accountability and Transparency Act of 2006 by increasing the accountability and transparency in federal spending, and for other purposes. We assessed (1) the completeness, timeliness, quality, and accuracy of the financial and award data that the FDIC submitted for the second quarter of Fiscal Year 2017 and published on USASpending.gov and (2) the FDIC’s implementation and use of the government-wide financial data standards established by the Office of Management and Budget and Department of the Treasury.
We concluded that the FDIC could reasonably rely on its source financial system forthe DATA Act submission for the second quarter of fiscal year 2017. However, the FDIC incorrectly reported certain data elements obtained from its source financial system when submitting its files. Therefore, although the FDIC’s data submission was timely and complete, the data lacked quality and was inaccurate in certain respects. Specifically, we identified three reporting errors:
- The FDIC should have reported a certain value as $1.067 billion and, instead, reported it as zero.
- The FDIC incorrectly overstated another data element by $10.9 million.
- The FDIC misclassified another data element, which led to an understatement in one object class and an overstatement in another.
We found that the FDIC did not correctly implement all data definitions as evidenced by the errors in the DATA Act submissions. We also identified control weaknesses in FDIC processes that contributed to the reporting inaccuracies. For example, the FDIC should strengthen controls around the submission process, including enhancing written procedures, defining roles and responsibilities of individuals tasked with DATA Act submissions, and establishing adequate segregation of duties and back-up resources. Without such control improvements, the FDIC is at risk for further inaccurate and lesser quality DATA Act submissions.
We made six recommendations to the Director of the Division of Finance to enhance DATA Act procedures, establish a mapping between DATA Act reporting requirements and financial system data elements, strengthen segregation of duties, train DATA Act team members and back-up resources, document quality review of DATA Act submissions, and correct and recertify the DATA Act submission for the second quarter of 2017. Management concurred with our recommendations.