The GAO found that the CFPB’s financial statements for FY 2013 and 2014 are represented fairly in accordance with GAAP, however, the CFPB’s internal control over financial reporting was not effective as of the end of FY 2014 because of a material weakness in internal control over the reporting of accounts payable. Also, there was no reportable noncompliance for FY 2014 with provisions of applicable laws, regulations, contracts and grant agreements GAO tested.
The material weakness is a result of serious control deficiencies that affected CFPB's determination and reporting of accounts payable, the GAO reports. The CFPB did not have effective procedures in place to determine and record an appropriate amount for goods and services received but not yet paid for as of September 30, 2014. Additionally, CFPB did not have effective review procedures to timely detect and correct inaccuracies in the accrual amounts.
In commenting on a draft of this report, the CFPB Director Richard Cordray stated that he was pleased to receive an unmodified audit opinion on CFPB's fiscal years 2014 and 2013 financial statements. Cordray also agreed with the material weakness over reporting of accounts payable and the significant deficiency over accounting for property and equipment that GAO reported, and added that CFPB will continue to work to enhance its system of internal control and ensure the reliability of its financial reporting.
Read the full report.