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GAO-14-455R 1 (2014-05-02)

handle is hein.gao/gaobaahwf0001 and id is 1 raw text is: GAOU.S. GOVERNMENT ACCOUNTABILITY OFFICE 441 G St. N.W. Washington, DC 20548 May 2, 2014 The Honorable Richard Cordray Director Bureau of Consumer Financial Protection Management Report: Improvements Needed in CFPB's Internal Controls and Accounting Procedures Dear Mr. Cordray: On December 16, 2013, we issued our report containing our opinion on fiscal years 2013 and 2012 financial statements of the Bureau of Consumer Financial Protection, known as the Consumer Financial Protection Bureau (CFPB). Our report also included (1) our opinion on the effectiveness of CFPB's internal control over financial reporting as of September 30, 2013, and our evaluation of CFPB's compliance with selected provisions of laws, regulations, contracts, and grant agreements during fiscal year 2013,1 and (2) two significant deficiencies2 we identified in CFPB's internal control over financial reporting related to year-end accounts payable accruals3 and recorded property and equipment amounts. The purpose of this report is to present additional information regarding the two significant deficiencies we identified along with related new recommendations. Title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act,4 referred to as the Consumer Financial Protection Act of 2010, created CFPB. The act charged CFPB with the responsibility of regulating the offering and provision of consumer financial products or services under the federal consumer financial laws. The act also requires CFPB to annually prepare financial statements and GAO to audit these statements.5 The Full-Year Continuing Appropriations Act of 2011 also requires that GAO audit CFPB's financial statements. 1GAO, Financial Audit. Bureau of Consumer Financial Protection's Fiscal Years 2013 and 2012 Financial Statements, GAO-14-170R (Washington, D.C.: Dec. 16,2013). 2A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. A material weakness is a deficiency, or combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected, on a timely basis. A control deficiency exists when the design or operation of a control does not allow management or employees in the normal course of performing their assigned functions to prevent, or detect and correct, misstatements on a timely basis. 3Under accrual accounting, entities record the effects of transactions, events, and circumstances in the periods in which they occur rather than only in the periods in which cash is received or paid by the entity. 4pub. L. No. 111-203, Title X, 124 Stat. 1376, 1955-2113 (2010). 512 U.S.C. § 5497(a)(5). GAO-14-455R CFPB Fiscal Year 2013 Management Report Page 1

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