ALCOAST 027/19 - FEB 2019 FISCAL YEAR 2018 USCG FINANCIAL AUDIT RESULTS

united states coast guard

R 061019 FEB 19
FM COMDT COGARD WASHINGTON DC//CG-8//
TO ALCOAST
UNCLAS //N07500//
ALCOAST 027/19
COMDTNOTE 7500
SUBJ:  FISCAL YEAR 2018 USCG FINANCIAL AUDIT RESULTS
1. I am pleased to announce the results of the independent auditors’ report on the
Department of Homeland Security’s (DHS) financial statements and internal controls over
financial reporting. For the sixth consecutive year, DHS received a clean, unmodified
audit opinion on its financial statements. The entire report is available for review at
https://www.oig.dhs.gov/sites/default/files/assets/2018-11/OIG-19-04-Nov18.pdf. A clean
opinion indicates that an independent auditor has reviewed our financial statements and
found them to be in compliance with applicable laws and accounting standards and not
materially misstated. This is a notable achievement for our Service and the Department.
Consecutive clean opinions demonstrate a commitment to excellence across the financial
enterprise and a continued maturation of Coast Guard financial and support practices.
2. While we received a clean opinion for the audit of financial statements, DHS received
an adverse audit opinion on its internal controls over financial reporting. The Coast
Guard contributed to material weaknesses in the areas of financial reporting, and
information technology controls and financial systems. Additionally, the audit report
noted Coast Guard deficiencies in property, plant and equipment (PP&E), and incidents of
noncompliance with the Federal Managers’ Financial Integrity Act, the Antideficiency Act,
and the Federal Financial Management Improvement Act. We have committed to DHS that we
will continue to take corrective action to resolve these deficiencies.
3. One of the largest line items on the Coast Guard’s balance sheet is PP&E. These
capitalized real and personal property assets are scattered across the United States. Your
dedication to accounting for and safeguarding these assets, including your participation in
semi-annual capitalized property inventories, contributes to the external auditors’
confidence that the Coast Guard is not materially misstating their financial statements.
Your efforts in reviewing and validating open obligations from non-cancelled appropriations
has been tremendous over the last several years. The undelivered order (UDO) balance (in
closeout status) has improved from over $100 million ten years ago to closer to $20 million
today, ensuring more accurate reporting of UDO balances for all appropriations. This marked
improvement also enables us to close active appropriations out with more precision, recover
invalid obligations from current year funds for use on other high priorities and from
non-cancelled appropriations for use on antecedent liabilities. Clean audit opinions, good
stewardship of assets and resources, and continual improvement in our ability to account for
and execute budget authority are all factors that build public trust and confidence in the
Coast Guard. We have shown that given the required resources, the Coast Guard will deliver,
and we will remain ready, relevant, and responsive.
4. Thank you for your continued efforts to ensure proper stewardship and accountability of
our resources.
5. RDML T.G. Allan Jr., Assistant Commandant for Resources and Chief Financial Officer, sends.
6. Internet release is authorized.