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GAO Report Faults CFPB on Internal Control Deficiencies

Jun 15, 2016
The Consumer Financial Protection Bureau (CFPB) has levied a $1.75 million civil penalty against Coppell, Texas-based Nationstar Mortgage LLC

While the Consumer Financial Protection Bureau (CFPB) keeps a suspicious eye on how financial institutions operate, the agency’s internal controls and accounting procedures continue to draw criticism from the Government Accountability Office (GAO).

In a new GAO report, the CFPB was faulted for “deficiencies” in its internal control over accounting for property, equipment and software that collectively constituted a significant deficiency in CFPB’s internal control over financial reporting.

“Specifically, GAO found that CFPB did not effectively design or implement controls to (1) reasonably assure accurate and timely classification and recording of software costs and (2) maintain ongoing accuracy and completeness of property and equipment inventory records,” the report stated. “In addition, GAO identified deficiencies that it did not consider to be material weaknesses or significant deficiencies, either individually or collectively, but nonetheless warrant CFPB management’s attention. These control deficiencies are related to reviewing and approving financial statements.”

The GAO offered five recommendations for the CFPB to correct its problems: a new requirement for vendors to provide detailed invoices with costs broken out by project; an updating of records by the agency’s chief financial officer (CFO) on the costs by project; the development of new training materials on how to conduct inventory of electronic equipment and how to update and maintain accurate inventory records; improved coordination between the agency’s CFO and Office of Technology and Innovation; and a new directive for the CFO design and implement more effective procedures over the preparation of CFPB financial statements and note disclosures.

While the CFPB did not acknowledge the GAO report on its Web site, the GAO stated that the agency had “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.”

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Jun 15, 2016
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