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Audit Report

OIG-16-054 FINANCIAL MANAGEMENT Report on the Bureau of the Fiscal Service Administrative Resource Center's Description of its Financial Management Services and the Suitability of the Design and Operating Effectiveness of its Controls for the Period July 1, 2015 to June 30, 2016 September 1, 2016

Office of Inspector General

Department of the Treasury

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DEPARTMENT OF THE TREASURY WASHINGTON, D.C. 20220

OFFICE OF INSPECTOR GENERAL

September 1, 2016

MEMORANDUM FOR SHERYL MORROW, COMMISSIONER BUREAU OF THE FISCAL SERVICE

FROM:

James Hodge Director, Financial Audit

SUBJECT:

Report on the Bureau of the Fiscal Service Administrative Resource Center's Description of its Financial Management Services and the Suitability of the Design and Operating Effectiveness of its Controls for the Period July 1, 2015 to June 30, 2016

I am pleased to transmit the attached subject report. Under a contract monitored by our office, KPMG LLP (KPMG), an independent certified public accounting firm, examined the Bureau of the Fiscal Service Administrative Resource Center's (ARC) description of its accounting and procurement processing, and general computer controls (financial management services); and the suitability of the design and operating effectiveness of these controls. This report includes management's description of ARC's system, management's written assertion, and KPMG's independent service auditor's report. The contract required that the examination be performed in accordance with generally accepted government auditing standards and the American Institute of Certified Public Accountants' Statement on Standards for Attestation Engagements Number 16, Reporting on Controls at a Service Organization.

In its examination, KPMG found in all material respects:

? the description fairly presents the financial management services that were designed and implemented throughout the period July 1, 2015 to June 30, 2016;

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? the controls related to the control objectives stated in the description were suitably designed to provide reasonable assurance that the control objectives would be achieved if the controls operated effectively throughout the period July 1, 2015 to June 30, 2016, and customer agencies applied the complementary customer agency controls and sub-service organizations applied the controls contemplated in the design of ARC's controls throughout the period July 1, 2015 to June 30, 2016; and

? the controls tested, which together with the complementary customer agency controls and sub-service organizations' controls, if operating effectively, were those necessary to provide reasonable assurance that the control objectives stated in the description were achieved, operated effectively throughout the period July 1, 2015 to June 30, 2016.

In connection with the contract, we reviewed KPMG's report and related documentation and inquired of its representatives. Our review, as differentiated from an examination in accordance with generally accepted government auditing standards, was not intended to enable us to express, and we do not express, an opinion on ARC's description of controls, the suitability of the design of these controls and the operating effectiveness of controls tested. KPMG is responsible for the attached independent service auditors' report dated August 30, 2016, and the conclusions expressed therein. However, our review disclosed no instances where KPMG did not comply, in all material respects, with generally accepted government auditing standards.

Should you have any questions, please contact me at (202) 927-0009, or a member of your staff may contact Mark S. Levitt, Manager, Financial Audit, at (202) 927-5076.

Attachment

U.S. Department of the Treasury Bureau of the Fiscal Service

Administrative Resource Center Financial Management Services Accounting and Procurement Processing and

General Computer Controls

Report on Administrative Resource Center's Description of Its Financial Management Services and the Suitability of the Design and Operating Effectiveness of Its Controls For the Period July 1, 2015 to June 30, 2016

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