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Watchdog Finds Problems With CFPB’s Internal Controls

investigation two BHThe Consumer Financial Protection Bureau (CFPB) has had a challenging year between all the Republican efforts to change its structure and the opening arguments of the PHH Mortgage Trial in which the Bureau’s constitutionality was called into question by a panel of three Republican judges.

Now the Government Accountability Office (GAO) has found some problems with the CFPB’s internal controls and accounting procedures, according to a report from the GAO released this week.

“During its audit of the Consumer Financial Protection Bureau’s (CFPB) fiscal years 2015 and 2014 financial statements, GAO identified deficiencies in CFPB’s internal control over accounting for property, equipment, and software that collectively constituted a significant deficiency in CFPB’s internal control over financial reporting,” the GAO reported.

The GAO specifically found that the Bureau had not designed or effectively implemented controls to: reasonably assure the accurate and timely classification of the recording of software costs, and maintain complete and accurate records of property and equipment inventory. The GAO said it identified deficiencies related to the CFPB’s reviewing and approving financial statements that the GAO did not consider to be significant deficiencies or material weaknesses but still needed the attention of CFPB’s management.

The GAO made five recommendations to the CFPB to address the significant deficiencies regarding the property, equipment, and software amounts recorded at year-end and the less significant deficiencies related to reviewing and approving financial statements. The recommendations included providing training to employees on a recurring basis on how to conduct inventory of electronic equipment and how to update and maintain accurate inventory records; updating the Office of the Chief Financial Officer's financial records to include costs by project; directing the program offices to require vendors to provide detailed invoices with costs broken out by project; and designing and implementing effective procedures over the preparation of CFPB financial statements and note disclosures.

“CFPB stated that it agreed with the recommendations GAO made in the report and has implemented or is in the process of implementing actions to address the issues GAO identified. GAO will evaluate CFPB’s actions for addressing the deficiencies identified in the report as part of GAO’s fiscal year 2016 audit,” the GAO reported.

Click here to view the GAO’s full 16-page report.

About Author: Brian Honea

Brian Honea's writing and editing career spans nearly two decades across many forms of media. He served as sports editor for two suburban newspaper chains in the DFW area and has freelanced for such publications as the Yahoo! Contributor Network, Dallas Home Improvement magazine, and the Dallas Morning News. He has written four non-fiction sports books, the latest of which, The Life of Coach Chuck Curtis, was published by the TCU Press in December 2014. A lifelong Texan, Brian received his master's degree from Amberton University in Garland.

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