Opportunities for Improvement in the Bureau of Consumer Financial Protection's Internal Controls and Accounting Procedures
May 21, 2012
During our audit of CFPB's fiscal year 2011 financial statements, we identified seven internal control issues that could adversely affect CFPB's ability to meet its internal control objectives. We do not consider these issues to represent material weaknesses or significant deficiencies in relation to CFPB's financial statements. Nonetheless, we believe they warrant management's attention and action. These issues concern necessary controls to ensure
- complete and finalized documentation of CFPB's accounting processes and procedures,in relation to CFPB's financial statements. Nonetheless, we believe they warrant management's attention and action. These issues concern necessary controls to ensure
- an effective internal control assessment process supporting management's internal control assertion,
- security over CFPB's data and information systems,
- accurate calculation and timely recording of CFPB undelivered orders balances,
- accurate calculation and timely disbursement of CFPB payroll transactions,
- proper prior approval of CFPB travel transactions, and
- timely recording of CFPB prepaid expenses as assets.
These issues increase the risk of CFPB not preventing or promptly detecting and correcting (1) misappropriation of assets because of reliance on insufficient internal controls; (2) unauthorized access, modification, or both of its data; and (3) misstatements in its financial statements. At the end of our discussion of each of these issues in the sections that follow, we present our related recommendations. These recommendations are intended to improve management's oversight and controls and minimize the risk of misappropriation of assets, misstatements in CFPB's accounts and financial statements, and unidentified vulnerabilities over the security of its data.