OFFICE OF INSPECTOR GENERAL EXPORT‐IMPORT BANK of the UNITED STATES Independent Auditor’s Report on the Export‐Import Bank’s Data Reliability September 28, 2015 OIG‐AR‐15‐07 .
OFFICEOFINSPECTORGENERALEXPORT‐IMPORTBANKoftheUNITEDSTATES
IndependentAuditor’sReportontheExport‐ImportBank’s
DataReliability
September28,2015OIG‐AR‐15‐07
.
IN S P E C T O R GE N E R A L
EXPORT-IMPORT BANK of the UNITED STATES
811 Vermont Avenue , N .W. Wash ing ton , D .C . 20571
September 28, 2015
To: C.J.Hall,ExecutiveVicePresidentandChiefRiskOfficerClaudiaSlacik,SeniorVicePresidentforExportFinanceandChiefBankingOfficerDavidSena,SeniorVicePresidentandChiefFinancialOfficer
From: TerrySettle,AssistantInspectorGeneralforAudits
Subject: IndependentAuditor’sReportontheExport‐ImportBank’sDataReliability
ThismemorandumtransmitsCotton&CompanyLLP’sauditreportonExport‐ImportBank’sDataReliability.Underacontractmonitoredbythisoffice,weengagedtheindependentpublicaccountingfirmofCotton&Companytoperformtheaudit.TheobjectivesoftheauditweretodetermineifthedatarecordedintheEx‐ImBankReportingSystem(ERS)wereadequatelysupportedbysourcedocumentationandwereaccurate,complete,andreliable.Cotton&CompanydeterminedthedatarecordedinERSweregenerallysupportedbysourcedocumentation.Further,therecordedinformationwasgenerallyaccurateandreliableandthefieldswerepopulatedcompletely.Ofthe6,509dataelementsthatweretested,Cotton&Companyidentified44elementsfrom8differentfieldsthatwereinaccuratelyrecorded.Intheirreviewof283authorizations,Cotton&Companyfound36authorizationsthathadatleast1dataelementrecordedinaccuratelyforauthorizationamount,disbursementamount,repaymentamount,smallbusinessamount,woman‐ownedamount,minority‐ownedamount,orprimarysupplier.Cotton&Companyalsoencountereddifficultiestestingdisbursementamountsforworkingcapitalguaranteeauthorizationsandwereunabletodeterminewhethertheassumeddisbursementswererecordedtimely.Finally,Cotton&CompanyfoundthattheOfficeoftheChiefFinancialOfficerwasunabletoprovidesourcedocumentationonatimelybasis,whichmadeitdifficulttoconductanefficientauditandobtainsufficient,appropriateevidencetoprovideabasisforourauditconclusions.Thereportcontainsfourrecommendationsandmanagementconcurredwithallfourrecommendations.Weconsidermanagement’s
proposedactionstoberesponsiveandtherecommendationswillbecloseduponcompletionandverificationoftheproposedactions.WeappreciatethecooperationandcourtesiesprovidedtoCotton&Companyandthisofficeduringtheaudit.Ifyouhavequestions,pleasecontactmeat(202)565‐3498orterry.settle@exim.gov.YoucanobtainadditionalinformationabouttheExport‐ImportBankOfficeofInspectorGeneralandtheInspectorGeneralActof1978atwww.exim.gov/oig.cc: FredHochberg,ChairmanandPresident
AngelaFreyre,GeneralCounselMichaelCushing,SeniorVicePresidentandChiefOperatingOfficer
InciTonguch‐Murray,DeputyChiefFinancialOfficerCristopolisDieguez,BusinessComplianceAnalystStevenKoons,Partner,Cotton&CompanyLLP
September 28, 2015
Terry Settle Assistant Inspector General for Audits Export‐Import Bank 811 Vermont Avenue, NW Washington, DC 20571 Subject: Independent Auditors’ Report on the Export‐Import Bank’s Data Reliability Dear Ms. Settle: Cotton & Company LLP is pleased to submit its performance audit report on the reliability of data recorded in the Export‐Import Bank of the United States (Ex‐Im Bank or the Bank) Reporting System (ERS). Specifically, we determined 1) whether the data recorded in ERS are adequately supported by source documentation and 2) if the data are accurate, complete, and reliable. Cotton & Company conducted an independent performance audit of data pertaining to long‐term (LT) direct loan, loan guarantee, working capital guarantee, and Global Credit Express (GCE) authorizations. Cotton & Company conducted this performance audit in accordance with generally accepted government auditing standards (GAGAS), as established in the Government Accountability Office (GAO)’s Government Auditing Standards, December 2011 Revision. Please feel free to contact me with any questions. Sincerely, COTTON & COMPANY LLP
Steven M. Koons, CPA, PMP Partner
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AUDIT REPORT OIG-AR-15-07
The Export‐Import Bank of the United States (Ex‐Im Bank) is the official export‐credit agency of the United States. Ex‐Im Bank is an independent, self‐sustaining executive agency and a wholly‐owned U.S. government corporation. Ex‐Im Bank’s mission is to support jobs in the United States by facilitating the export of U.S. goods and services. Ex‐Im Bank provides competitive export financing and ensures a level playing field for U.S. exports in the global marketplace.
The Office of Inspector General, an independent office within Ex‐Im Bank, was statutorily created in 2002 and organized in 2007. The mission of the Ex‐Im Bank Office of Inspector General is to conduct and supervise audits, investigations, inspections, and evaluations related to agency programs and operations; provide leadership and coordination as well as recommend policies that will promote economy, efficiency, and effectiveness in such programs and operations; and prevent and detect fraud, waste, abuse, and mismanagement.
ACRONYMS
APS ApplicationProcessingSystemEOL Ex‐ImOnlineERS Ex‐ImBankReportingSystemFMS‐NG FinancialManagementSystem–NextGenerationFY fiscalyearF&A FinancialandAdministrativeSystemGAGAS generallyacceptedgovernmentauditingstandardsGAO GovernmentAccountabilityOfficeGCE GlobalCreditExpressGPRA GovernmentPerformanceandResultsActLT long‐termMT medium‐termOCFO OfficeoftheChiefFinancialOfficerOIG OfficeofInspectorGeneralQ quarter
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AUDIT REPORT OIG-AR-15-07
Why OIG Contracted for This Audit TheExport‐ImportBankoftheUnitedStates(Ex‐ImBankortheBank)storesauthorizationandotherinformationrelatedtoitsproductsintheEx‐ImBankReportingSystem(ERS),adatawarehousestoringinformationfromavarietyofsystemsandusedformanagementanalysisandexternalreporting.TheOfficeofInspectorGeneralcontractedustoconductaperformanceauditofthereliabilityoftheBank’sERSdataforlong‐term(LT)directloan,medium‐term(MT)andLTloanguarantee,workingcapitalguarantee,andGlobalCreditExpress(GCE)products.
What We Recommended WemadefourrecommendationsforEx‐ImBank:(1)reviewtheprocessforrecordingandreviewingauthorization,disbursement,repayment,smallbusiness,woman‐owned,minority‐owned,andprimarysupplierdatafieldsinERStodeterminehowspecificerrorsoccurred;correcttheerrors;andrevisetheprocess;(2)conductacomprehensivereviewusingsourcedocumentationtodeterminewhetherthecurrently‐recordedERSdataareaccurateandsupported,andmakenecessarycorrectionsinthepopulationfordisbursement,repayment;smallbusiness,woman‐ownedandminority‐owneddatafields;(3)communicatetostafftheimportanceofprovidingdatatoauditorsonatimelybasisandtakeactionstomanageconcurrentprioritiesandconsistentlyadheretodeadlinesandauditmilestones;and(4)reviewtheproceduresforstoringandretrievingdatasothatdataarereadilyretrievableforbothmanagementneedsandreviewbyauditors.Managementconcurredwithallfourrecommendations.
What We Found TheobjectivesofthisperformanceauditweretodetermineifthedatarecordedinERSwereadequatelysupportedbysourcedocumentationandwereaccurate,complete,andreliable.WedeterminedthedatarecordedinERSweregenerallysupportedbysourcedocumentation.Further,therecordedinformationwasgenerallyaccurateandreliableandthefieldswerepopulatedcompletely.Specifically,wereviewed23datafieldsforeachtransactioninoursample,equatingto6,509dataelementsbeingtested.Ofthese6,509dataelements,weidentified44elementsfrom8differentfieldsthatwereinaccuratelyrecorded.Wedidnotidentifyerrorsintheother15fieldswetested.Inourreviewof283authorizationsforLTdirectloans,MTandLTguarantees,workingcapitalguarantees,andGCEscombined,wefound36authorizationsthathadatleast1dataelementrecordedinaccurately.Thefigurebelowsummarizestheerrorsweidentified.
Overallsummaryofnumbersoferrorsandprojectederrors
FieldsNumbersofErrors
ProjectedErrorRates
Authorizations 1 0.85%DisbursementAmount* 2 1.38%RepaymentAmount 4 1.02%SmallBusinessAmount 6 0.78%Woman‐OwnedAmount 6 1.60%Minority‐OwnedAmount 11 3.41%PrimarySupplier 12 1.55%DisbursementDate** 2
Note:Projectederrorratesrepresentpointestimates.*Disbursementamountinformationdoesnotreflectresultsforworkingcapitalguarantees.**Errorsrelatedtodisbursementdatewerenotstatisticallyprojected.
Wealsoencountereddifficultiestestingdisbursementamountsforworkingcapitalguaranteeauthorizationsandwereunabletodeterminewhethertheassumeddisbursementswererecordedtimely.Whilewequestioneddisbursementamountsfor22workingcapitalguarantees,wedidnotincludetheminourdisbursementprojections.TheBankshouldaccuratelyandtimelyrecordtransactions.WedeterminedthattheseerrorsrepresentincreasedriskstotheBank’sabilitytouseERSdataforreliablemanagementanalysisandaccuratereporting.Moreover,thequestioneddisbursementamountsfortheworkingcapitalguaranteesraisequestionsastowhethertheBankhassufficientprocessestotimelyandaccuratelycaptureinformationinERSorthesourcesystemsthatfeedintoERS.
WealsofoundthattheOfficeoftheChiefFinancialOfficer(OCFO)wasunabletoprovidesourcedocumentationonatimelybasis,whichmadeitdifficulttoconductanefficientauditandobtainsufficientappropriateauditevidencetoprovideabasisforourauditconclusions.Althoughweultimatelywereabletoobtainsufficientinformationwiththeexceptionofworkingcapitalguaranteedisbursements,thedelaysincreasedauditcostsanddelayedreportingofresults.ThedelaysweencounteredonthisperformanceauditimpededtheOfficeofInspectorGeneral’sabilitytocarryoutitsauthoritiesandprovidethenecessaryoversighttoservethepublicinterest.
Executive Summary September 28, 2015 Independent Audit of Ex-Im Bank’s Data Reliability OIG-AR-15-07
Foradditionalinformation,contacttheOfficeoftheInspectorGeneralat(202)565‐3908orvisitwww.exim.gov/oig.
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AUDIT REPORT OIG-AR-15-07
INTRODUCTION Objectives ...................................................................................................................... 1
Scope and Methodology .............................................................................................. 1
Background .................................................................................................................... 3
RESULTS Finding 1: ERS Is Generally Accurate, But Contains Various Recording Errors ... 6
Recommendations, Management’s Response, and Evaluation of Management’s Response ...................................................................................................................... 12
Finding 2: Ex-Im Bank’s OCFO Did Not Provide Documentation on a Timely Basis .............................................................................................................................. 12
Recommendation, Management’s Response, and Evaluation of Management’s Response ...................................................................................................................... 14
APPENDICES Appendix A: ERS Fields Tested ................................................................................. 15
Appendix B: Management Comments ..................................................................... 16
TABLE OF CONTENTS
1 AUDIT REPORT OIG-AR-15-07
Objectives ThisreportpresentstheresultsofCotton&CompanyLLP’s(Cotton&Company)performanceauditofthereliabilityoftheExport‐ImportBankoftheUnitedStates(Ex‐ImBankortheBank)’sdatarecordedintheEx‐ImBankReportingSystem(ERS)forlong‐term(LT)directloan,medium‐term(MT)andLTloanguarantee,workingcapitalguarantee,andGlobalCreditExpress(GCE)products.TheobjectivesofthisperformanceauditweretodetermineifthedatarecordedinERSwereadequatelysupportedbysourcedocumentationandwereaccurate,complete,andreliable.
Scope and Methodology Cotton&CompanyplannedandperformedtheaudittodeterminewhetherEx‐ImBank’sERSdataareaccurate,complete,andreliable,andsupportedbysourcedocumentation.Specifically,wedesignedourtestprocedurestomeettheabove‐listedobjectivesforthefourBankproductsweaudited:LTdirectloans,MTandLTguarantees,workingcapitalguarantees,andGCEs.Insuranceproductswerenotincludedinthescopeofourauditduetothehighvolumeandlowdollaramountofthetransactions.WeconductedinterviewsandmadeinquiriesofpersonnelfromtheOfficeoftheChiefFinancialOfficer(OCFO),andtheBusinessCredit,OperationsandDataQuality,Transportation,andStructuredandProjectFinanceDivisionstoobtainanunderstandingofthetypesofsourcedocumentationavailableforthefourproductswetested.Wedocumentedourtestingmethodologybycreatingaplanningmemorandumandauditworkprogram.Inaddition,wepreparedadetailedplanforstratifiedclassicvariablessampling,whichisasamplingmethodologythatusesnormaldistributiontheorytoevaluatethedollaramountofselectedcharacteristicsofapopulationonthebasisofasampleoftheitemsconstitutingthepopulation.Thestratifiedsamplecanalsobeevaluatedforattributes.Thissampleevaluationmethodologyusesthehypergeometricdistributiontoevaluatetherateofoccurrenceofselectedcharacteristicsofapopulationonthebasisofasampleoftheitemsconstitutingthepopulation.Weperformedtheprojectionsandevaluationsofthesampleonlyonastratifiedattributesbasis.Wedidthisbecausethetypesoferrorswefoundseemunrelatedtodollaramountsandmoreindicativeofsystemandprocessweaknesses.WeobtainedapopulationofERSauthorizationsissuedduringthefollowingperiods:
FiscalYear(FY)2014‐relateddatawasasofSeptember30,2014and FY2015quarter(Q)1andQ2(October1,2014throughMarch31,2015)‐related
datawasasofMarch31,2015.TheOCFOtoldustheFY2015datawerefromatestenvironment,butthatitreconciledthedatatoensuretheywerecorrect.Inaddition,weperformedlimitedprocedurestovalidate
INTRODUCTION
2 AUDIT REPORT OIG-AR-15-07
thecompletenessofthepopulation.Specifically,fortheFY2014data,weassessedthecompletenessoftheERSdatabyagreeingamountsandquantitiestotheFY2014AuthorizationsSummaryincludedinEx‐ImBank’s2014AnnualReportandreviewingthefinancialstatementauditors’considerationofsuchamountsandquantities.FortheFY2015data,nosuchinformationwasavailableatthetimeofouraudit.Accordingly,wevalidatedthecompletenessoftheERSdatabycomparingittotwosourcesystems:Ex‐ImOnline(EOL)andtheApplicationProcessingSystem(APS)usedforprocessingEx‐ImBank’sproducts.WedeterminedthattheseERSdataweresufficientlyreliableforustosampleeachoftheproductsweaudited.However,wedidnotperformothercompletenessprocedurestodetermineiftherewereunrecordedtransactions.WestratifiedthepopulationofauthorizationsandselectedstratifiedrandomprobabilitysamplesofMTandLTguarantees,workingcapitalguarantees,andGCEs.ForLTdirectloans,therewereonly16itemsinthepopulation.Assuch,wetestedall16items.NoMTdirectloanswereinthepopulation.Figure1showsthesamplesizeandpopulationinformationofthedata:
Figure1:PopulationofdatarecordedinEx‐ImBank’sERSforFY2014andQ1andQ2FY2015
ProductsTotal
PopulationTotalAmountAuthorized
No.ofTransactionsinSample
TotalAmountAuthorizedofTransactionsin
SampleLTDirectLoans 16 $1,937,648,266 16 $1,937,648,266MTandLTLoanGuarantees 148 14,924,335,414 90 14,256,992,282WorkingCapitalGuarantees 529 2,732,666,987 139 1,649,600,980GlobalCreditExpress(GCE) 81 30,215,000 38 14,650,000Totals 774 $19,624,865,667 283 $17,858,891,528
Weperformedtestsofauthorizationdataonthesamplesforeachofthefourproductsweaudited.Weexaminedsourcedocumentationandrelatedevidence,includingapplications,boardauthorizationmemoranda,promissorynotes,amortizationschedules,engineeringreports,loanauthorizationnotices,borrower’srequestsfordisbursement,andotherEx‐ImBankdocumentation.SomeofthisdocumentationispreparedaspartofEx‐ImBank’sinternalcontrolactivities;however,wedidnottest,andthereforewedidnotconcludeon,thedesignoroperatingeffectivenessofinternalcontrols.Foreachitemselected,wetestedwhetherinformationrecordedinERSwassupportedbysourcedocumentationandaccuratelyrecorded.SeeAppendixAforthedetailedlistofERSfieldswetested.
Asnotedabove,weauditedthereliabilityofauthorizationdatarecordedinERS,Ex‐ImBank’sdatawarehouse.Wedidnotconductafinancialstatementaudit,nordidweauditdatadirectlyfromthefinancialmanagementsystem.Accordingly,wedonotexpressanopinionorprovideanyassuranceonEx‐ImBank’sfinancialstatements.
Weconductedourauditon‐siteatEx‐ImBankinWashington,DC,aswellasremotelyattheCotton&CompanyofficeinAlexandria,VA,duringMarch2015throughSeptember2015.
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Cotton&Companyconductedthisperformanceauditinaccordancewithgenerallyacceptedgovernmentauditingstandards(GAGAS),asestablishedintheGovernmentAccountabilityOffice(GAO)’sGovernmentAuditingStandards,December2011Revision.Thosestandardsrequirethatweplanandperformtheaudittoobtainsufficient,appropriateevidencetoprovideareasonablebasisforourfindingsandconclusionsbasedonourauditobjectives.Webelievethattheevidenceobtainedprovidesareasonablebasisforourfindingsandconclusionsbasedonourauditobjectives.WediscussedourfindingsandconclusionswithmanagementofficialsonSeptember2,2015;providedmanagementwithadraftofourreportonSeptember8,2015;andincludedtheircommentsandourresponsestothemwhereappropriate.
Background Ex‐ImBankisanindependent,self‐sustainingexecutiveagencyandawholly‐ownedUnitedStatesgovernmentcorporation.Ex‐ImBank’scharter,TheExportImportBankActof1945,asamendedthroughPublicLaw112‐122,May30,2012,states:
It is the policy of the United States to foster expansion of exports ofmanufactured goods, agricultural products, and other goods andservices, thereby contributing to the promotion and maintenance ofhigh levels of employment and real income, a commitment toreinvestment and job creation, and the increased development of theproductiveresourcesoftheUnitedStates.
Tofulfillitscharter,Ex‐ImBankassumesthecreditandcountryrisksthattheprivatesectorisunableorunwillingtoaccept.TheBankprovidesworkingcapitalguarantees,exportcreditinsurance,loanguarantees,anddirectloanstocountertheexportfinancingprovidedbyforeigngovernmentsonbehalfofforeigncompaniesandhelpU.S.exportersremaincompetitive.Forworkingcapitalguarantees,Ex‑ImBankprovidesrepaymentguaranteestolendersonsecured,short‐termworkingcapitalloansmadetoqualifiedexporters.Theworkingcapitalguaranteemaybeapprovedforasingleloanorarevolvinglineofcredit.Ex‑ImBank’sworkingcapitalguaranteeprotectsthelenderfromdefaultbytheexporterfor90percentoftheloanprincipalandinterest.ExportcreditinsuranceallowsU.S.exporterstoselltheirgoodsoverseasbyprotectingthemagainsttheriskofforeign‐buyerorotherforeign‐debtordefaultforpoliticalorcommercialreasons,allowingthemtoextendcredittotheirinternationalcustomers.LoanguaranteesonaMTorLTbasiscovertherepaymentrisksontheforeignbuyer’sdebtobligationsincurredtopurchaseU.S.exports.Generally,boththeMTandLTguaranteeprogramscoverupto85percentoftheU.S.contractvalueofshippedgoods.Intheeventofapaymentdefaultbytheborrower,Ex‐ImBankwillpaytothelendertheoutstandingprincipalandinterestontheloan.
4 AUDIT REPORT OIG-AR-15-07
Ex‑ImBankoffersMTandLTfixed‐rateloansdirectlytoforeignbuyersofU.S.goodsandservices.Ex‑ImBankextendstoacompany’sforeigncustomerafixed‐rateloancoveringupto85percentoftheU.S.contractvalue.ThebuyermustmakeacashpaymenttotheU.S.exporterofatleast15percentoftheU.S.contractvalue.Inaddition,Ex‐ImBankoffersGCEloans,inwhichcreditworthysmallbusinessexportersmaybeeligiblefor6‐or12‐monthrevolvinglinesofcreditofupto$500,000.TheinformationforauthorizationsrelatedtothesevariousproductsisstoredinERS,adatawarehouse.TheinformationinERSoriginatesinavarietyofothersystems,including:
EOL,aweb‐basedinfrastructurethatallowsusers(i.e.,exporters,importers)tosubmitinformationelectronicallyandcheckonexport/importrecords.EOLisusedtocaptureinitialapplicationdataandtrackdocuments.
APS,asystemusedtoprocessproductsfromtheinitialcustomercontacttoapplicationreceipt,underwritingevaluation,andwhenapplicable,underwritingapproval.
FinancialandAdministrativeSystem(F&A),anin‐house,customdevelopedfinancialsystemofEx‐ImBank.TheBankusedF&AforFY2014activities.
FinancialManagementSystem–NextGeneration(FMS‐NG),acommercial‐off‐the‐shelfsystemcomprisedofOracleFederalFinancialsandOracleLoans.Ex‐ImBankinitiateditsFMS‐NGimplementationprojectinFY2012andlaunchedtheuseofFMS‐NGonOctober1,2014,forFY2015activities.Ex‐ImBankcontinuestoworkonreconcilingandintegratingFMS‐NGwithBankoperations.
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Duringouraudit,wedeterminedthatthedatarecordedinERSweregenerallysupportedbysourcedocumentation.Further,therecordedinformationwasgenerallyaccurateandreliableandthefieldswerepopulatedcompletely.However,weidentifiedinstanceswheretheBankrecordedinaccurateinformationwithrespecttothefieldsthatwetested.Specifically,theBankdidnotaccuratelyrecordinERScertain(1)authorization,disbursement,andrepaymentamounts;(2)smallbusiness,woman‐owned,andminority‐ownedparticipationamounts;and(3)primarysuppliers.Figure2presentsanoverallsummaryofthenumbersoferrorsandprojectederrorratesforeachofthesecategories:
Figure2:Overallsummaryofnumbersoferrorsandprojectederrors
FieldsNumbersofErrors
ProjectedErrorRates
Authorizations 1 0.85%DisbursementAmount* 2 1.38%RepaymentAmount 4 1.02%SmallBusinessAmount 6 0.78%Woman‐OwnedAmount 6 1.60%Minority‐OwnedAmount 11 3.41%PrimarySupplier 12 1.55%DisbursementDate** 2Note:Projectederrorratesrepresentpointestimates.*Disbursementamountinformationdoesnotreflectresultsforworkingcapitalguarantees.**Errorsrelatedtodisbursementdatewerenotstatisticallyprojected.
Furthermore,weencountereddifficultiestestingdisbursementamountsfortheworkingcapitalguaranteeauthorizations.BasedontheERSdatawereceived,wewereunabletodeterminewhetherassumeddisbursementswererecordedtimely.Accordingly,wedidnotincludeworkingcapitalguaranteesinourdisbursementprojections.WedeterminedthattheseerrorsrepresentedincreasedriskstotheBank’sabilitytouseERSdataforreliablemanagementanalysisandaccuratereporting,includingexternalpublications,suchasEx‐ImBank’sGovernmentPerformanceandResultsAct(GPRA)ReportsandAnnualReports.Moreover,thedifficultiesweencounteredintestingtheworkingcapitalguaranteedisbursementsraisequestionsastowhethertheBankhassufficientprocessestotimelyandaccuratelycaptureinformationinERSorthesourcesystemsthatfeedintoERS.
Inaddition,wefoundthattheOCFOwasunabletoprovidesourcedocumentationonatimelybasis,whichmadeitdifficulttoconductanefficientauditandobtainsufficientappropriateauditevidencetoprovideabasisforourauditconclusions.Althoughweultimatelywereabletoobtainsufficientinformationwiththeexceptionofworkingcapitalguaranteedisbursements,thedelaysincreasedauditcostsanddelayedreportingofresults.ThedelaysweencounteredonthisperformanceauditimpededtheOfficeofInspector
RESULTS
6 AUDIT REPORT OIG-AR-15-07
General’s(OIG)abilitytocarryoutitsauthoritiesandprovidethenecessaryoversighttoservethepublicinterest.Wemadefourrecommendationstoaddresstheaboveissues.Theserecommendations,ifimplemented,shouldhelpimprovereliabilityofdatainERS.Ex‐ImBankmanagementagreedwithourrecommendationsandstatedthatithasalreadytakenactioninresponsetoourrecommendations.Ex‐ImBankmanagement’sresponsestothefindingsidentifiedinourperformanceauditareincludedwithinthereportandinAppendixB.WedidnotauditEx‐ImBankmanagement’sresponses,andaccordingly,weexpressnoopiniononthem.
Finding 1: ERS Is Generally Accurate, But Contains Various Recording Errors
WedeterminedthatthedatarecordedinERSweregenerallysupportedbysourcedocumentation.Further,therecordedinformationwasgenerallyaccurateandreliableandthefieldswerepopulatedcompletely.Specifically,wereviewed23datafieldsforeachtransactioninoursample,equatingto6,509dataelementsbeingtested.Ofthese6,509dataelements,weidentified44elementsfrom8differentfieldsthatwereinaccuratelyrecorded.Wedidnotidentifyerrorsintheother15fieldswetested.Inourreviewof283authorizationsforLTdirectloans,MTandLTguarantees,workingcapitalguarantees,andGCEscombined,wefound36authorizationsthathadatleast1dataelementrecordedinaccurately.Specifically,theBankdidnotaccuratelyrecordinERScertain(1)authorization,disbursement,andrepaymentamounts;(2)smallbusiness,woman‐owned,andminority‐ownedparticipationamounts;and(3)primarysuppliers.Numbersoferrorsandprojectederrorratesaresummarizedaboveinfigure2anddetailedinthesectionsbelow.Inaddition,wequestioneddisbursementamountsfor22workingcapitalguarantees.InaccordancewithGAO’sStandardsforInternalControlintheFederalGovernment(1999),theBankshouldaccuratelyandtimelyrecordtransactions.TheBankshouldhavesufficientcontrolactivitiestoensurethatalltransactionsarecompletelyandaccuratelyrecorded.WedeterminedthattheseerrorsrepresentincreasedriskstotheBank’sabilitytouseERSdataforreliablemanagementanalysisandaccuratereporting.Moreover,thequestioneddisbursementamountsfortheworkingcapitalguaranteesraisequestionsastowhethertheBankhassufficientprocessestotimelyandaccuratelycaptureinformationinERSorthesourcesystemsthatfeedintoERS.
Ex-Im Bank Incorrectly Recorded Certain Authorization, Disbursement, and Repayment Amounts in ERS
WefoundthatEx‐ImBank’sERSdatacontainederrorsrelatedtotheauthorization,disbursement,andrepaymentamountsforsomeoftheauthorizationswetested.AuthorizationForoneworkingcapitalguaranteeauthorizedinFY2015,theauthorizedamountrecordedinERSdidnotagreewithsupportingdocumentation;theamountrecordedinERSwasoverstatedby$900.Basedonourstatisticalprojectionsoftheseresults,weprojected
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sevenerrorswithauthorizedamountsforworkingcapitalguarantees(1.24percent).Weare95percentconfidentthattherearenomorethan32possibleerrors(6.04percent)intheworkingcapitalguaranteepopulation.Theoverallprojectederrorrateforauthorizationsforallthepopulationswas0.85percentwithanuppererrorlimitof4.23percentatthe95percentconfidenceinterval.DisbursementsForLTandMTguarantees,wenotedtwoinstancesinwhichthedisbursementamountsrecordedinERSwereunderstatedanddidnotagreewithsourcedocumentation,suchaspromissorynotesanddisbursementrequestsfromexternallenders.Theprojectionofthiserrorratewas2.28percentandtheuppererrorlimitwas6.08percent.Theoverallprojectederrorratefortheentirepopulationwas1.38percentwithanuppererrorlimitof4.20percentatthe95percentconfidencelevel.Thetwoinstancesresultedin$194millionthatwasnotrecordedinERSasofMarch31,2015;oursamplehadmorethan$6billionofrecordeddisbursements,excludingworkingcapitalguaranteeswhichwewilldiscussseparatelybelow.ThetwoinstancesinvolvedoneFY2015LTguaranteeandoneFY2015MTguaranteeforwhichweobservedpromissorynoteanddisbursementrequestsupport,respectively,thatevidencedthereshouldhavebeendisbursementsrecordedasofMarch31,2015.AlongwiththeFY2015launchofFMS‐NGonOctober1,2014,theOCFOtoldusitconductedapost‐implementationexercisetoreconcileFMS‐NGdatapriortothisdatabeingreleasedinERS.TheOCFOalsotoldusthataspartofthisreconciliation,thetwoinstancesmentionedabovehadbeenidentifiedandweresubsequentlycorrected.SummaryresultsofourtestingandourrelatedstatisticalprojectionsarepresentedinFigure3,below.
Figure3:Disbursementamounts,errors,projectederrorrates,andupperlimitsoferrorrates
Products DisbursementResults
TotalDisbursementsinSample
AbsoluteAmountofErrors
ProjectedErrorRates
UpperLimitsofErrorRates
LTDirectLoans* $58,351,362 $0 0.00% 0.00%MTandLTLoanGuarantees 6,293,118,566 194,408,211 2.28% 6.08%GlobalCreditExpress(GCE) 4,407,503 0 0.00% 4.94%
OverallSummary $6,355,877,431 $194,408,211 1.38% 4.20%
*Giventherewereonly16LTdirectloansinthepopulation,wetestedallitems.Therefore,wedidnotneedtomakestatisticalprojections.Note:Projectederrorratesrepresentpointestimates;upperlimitsoferrorratesrepresentthemaximumpossibleerrorrateatthe95percentconfidencelevel.Theoverallsummaryprojectederrorratesandupperlimitsoferrorratesarebasedonoverallstatisticalprojectionsandarenotthesumofdetailedamountsforeachproduct.
Weencountereddifficultiestestingdisbursementamountsfortheworkingcapitalguaranteeauthorizationsandaccordingly,didnotincludeworkingcapitalguaranteesinourdisbursementprojections.Inthecaseofworkingcapitalguarantees,Ex‐ImBankdoesnottrackactualcashflows,butratherrecordsassumeddisbursementswhencertainconditionsaremet,includingreceiptoffees,requireddocumentationfromdelegatedauthoritylenders,andEx‐ImBankauthorization.
8 AUDIT REPORT OIG-AR-15-07
TheERSdatafromwhichweselectedourstatisticalsamplecontainedaggregateddisbursementandrepaymentinformationasofSeptember30,2014,forFY2014authorizationsandasofMarch31,2015,forQ1andQ2FY2015authorizations.OCFOprovidedERSdatabyindividualtransactiondatetofacilitateourtestingofthedisbursementsandrepaymentsforitemsweselected.ThedisaggregatedERSdataprovidedbyOCFOdidnotagreetotheoriginaldatawereceived.Afterseveralinquiries,weultimatelylearnedthesedifferencesexistedbecausethedisaggregatedERSdatawerebasedupontheeffectivedatesofthetransactions,notbaseduponthegeneralledgerpostingdates.ItisOCFO’spracticetorecordtheeffectivedateofadisbursementasthedisbursementdateinERS,evenifthatdateismonthspriortothegeneralledgerpostingdateoftheassumeddisbursement.Assuch,basedontheERSdatawereceived,wewereunabletodeterminewhetherassumeddisbursementswererecordedtimely.Thedisaggregateddatacontaineddisbursementdatesthatwerebackdatedtotheactualeffectivedateoftheassumeddisbursement,ratherthanthedatethedisbursementwaspostedinthegeneralledger.Accordingly,wedidnotprojectresultsforworkingcapitalguarantees.ForworkingcapitalguaranteesauthorizedinFY2014,wewereabletotesttheamounts,butwereunabletotestthetimelinessofrecording.ForQ1andQ2FY2015workingcapitalguarantees,wequestioned22ofthe25workingcapitalguaranteeauthorizationsinoursampleforwhichERShadarecordeddisbursementamountof$0.00asofMarch31,2015.Further,wenotedthatonly4ofthetotalpopulationof98workingcapitalguaranteesauthorizedinQ1andQ2ofFY2015hadrecordeddisbursements.GiventhattheFY2015authorizationsoccurredasearlyasOctober1,2014,andwesawevidenceofthereceiptoffees,wewouldhaveexpectedmoredisbursementstoberecordedasofMarch31,2015.Duringtheaudit,theBankdidnotprovideevidenceforustodeterminewhetherornotallconditionsweremettohaveassumedthedisbursementsonallofthesampledworkingcapitalguaranteesasofMarch31.However,wewereabletoconfirmthatatleastsomeofthetransactionsshouldhavehadassumeddisbursementsrecorded.OCFOattributestherecordingdelaystoitsoperationalprocesses,citingthatitcantakeasignificantamountoftimetoconfirmthatallconditionsaremettorecordanassumeddisbursement.OCFOalsociteddelaysinrecordingtheassumeddisbursementsasaresultoftheprioritizationofFMS‐NGimplementationactivities,whichincludedapost‐implementationexercisetoreconcileFMS‐NGdatapriortothedatabeingreleasedinERS.OCFOtoldusthefirstBank‐widereleaseofFY2015Q1financialdataoccurredinJune2015,andthatitmustvalidatebeforereleasingthemtoexternalparties.OCFO’sprocessmeansthattheworkingcapitalguaranteeassumeddisbursementamountsinERSmaybeincompleteatanygiventime,suchthatEx‐ImBankisunabletoreliablydeterminetheamountsoutstandingforthoseauthorizations.Itisimportantthatthisinformationisaccurateasitisusedtocalculatelossreserves.Further,thedelaysraisequestionabouttheefficiencyandeffectivenessofOCFO’sprocessforrecordingassumeddisbursements.
9 AUDIT REPORT OIG-AR-15-07
Finally,wenotedtwoinstancesinwhichtheeffectivedateforthedisbursementrecordedinERSdifferedfromthesourcedocumentation.EventhoughthetwoERSdisbursementdateswereincorrect,theamountswererecordedcorrectly.Wedidnotprojecttheseerrors.RepaymentsWenotedfourinstancesinwhichtheERSrepaymentamountdidnotagreewithsourcedocumentation,suchaspromissorynoteamortizationschedules,decisionmemoranda,andwiretransferevidence.Specifically,wenotedtwoLTguarantees,oneMTguarantee,andoneGCEforwhichtherecordedrepaymentamountswereincorrect.TherepaymentamountsforthetwoLTguaranteesandoneMTguaranteedidnotagreewiththeassumedrepaymentsinthesourcedocumentation.TheonerepaymenterrorforaGCEinvolvedanFY2014repaymentof$1,941thatwasrecordedearlyinFY2015.OCFOstateditdidnotbelievethisrepresentedanerrorasitoccurredasaresultoftheirprocessforrecordingtransactionsandthecashwasaccountedforonthefinancialstatements.However,sincetherepaymenteventoccurredinFY2014,itshouldbeaccountedforintheBank’sFY2014reportingsystemdata.SummaryresultsofourtestingandourrelatedstatisticalprojectionsarepresentedinFigure4,below.
Figure4:Repaymentamounts,repaymenterrors,projectederrorrates,andupperlimitsoferrorrates
Products RepaymentResults
TotalRepaymentsin
Sample
AbsoluteAmountofErrors
ProjectedErrorRates
UpperLimitsofErrorRates
LTDirectLoans* $0 $0 0.00% 0.00%MTandLTLoanGuarantees 131,223,901 1,718,711 3.89% 8.78%WorkingCapitalGuarantees 151,849,930 0 0.00% 4.29%GlobalCreditExpress(GCE) 100,000 1,941 2.63% 8.64%
OverallSummary $283,173,831 $1,720,652 1.02% 4.16%
*Giventherewereonly16LTdirectloansinthepopulation,wetestedallitems.Therefore,wedidnotneedtomakestatisticalprojections.Note:Projectederrorratesrepresentpointestimates;upperlimitsoferrorratesrepresentthemaximumpossibleerrorrateatthe95percentconfidencelevel.Theoverallsummaryprojectederrorratesandupperlimitsoferrorratesarebasedonoverallstatisticalprojectionsandarenotthesumofdetailedamountsforeachproduct.
Inaccurateauthorization,disbursement,andrepaymentamountsimpairtheBank’sabilitytomonitoramountsoutstandingandreportthestatusofsuchinformationinexternalpublicationssuchastheGPRAandAnnualReports.Ex-Im Bank Inaccurately Recorded Certain Small Business, Woman-Owned, and Minority-Owned Participation Amounts in ERS
Ex‐ImBankdidnotproperlyrecordsomesmallbusiness,woman‐owned,andminority‐ownedparticipationamountsinERS.Specifically,wefound23errorsinthesampledauthorizationswetested.Theseerrorsincludedunderstatementsandoverstatements.
10 AUDIT REPORT OIG-AR-15-07
WenotedsixinstancesinwhichthesmallbusinessamountrecordedinERSdifferedfromthesourcedocumentation,theengineeringmemorandum,foreachcorrespondingauthorization.SummaryresultsofourtestingandourrelatedstatisticalprojectionsarepresentedinFigure5,below.
Figure5:Smallbusinesserrors,projectederrorrates,andupperlimitsoferrorrates
Product SmallBusiness Absolute
AmountofErrors
NumbersofErrorsinSample
ProjectedErrorRates
UpperLimitsofErrorRates
LTDirectLoans* $1,918,816 4of16 25.00% 25.00%MTandLTLoanGuarantees 10,650,768 2of90 1.35% 4.73%WorkingCapitalGuarantees 0 0of139 0.00% 4.29%GlobalCreditExpress(GCE) 0 0of38 0.00% 4.94%OverallSummary $12,569,584 6of283 0.78% 3.82%*Giventherewereonly16LTdirectloansinthepopulation,wetestedallitems.Therefore,wedidnotneedtomakestatisticalprojections.Note:Projectederrorratesrepresentpointestimates;upperlimitsoferrorratesrepresentthemaximumpossibleerrorrateatthe95percentconfidencelevel.Theoverallsummaryprojectederrorratesandupperlimitsoferrorratesarebasedonoverallstatisticalprojectionsandarenotthesumofdetailedamountsforeachproduct.
Wenotedsixinstancesinwhichthewoman‐ownedamountrecordedinERSdifferedfromtheamountlistedintheapplication.SummaryresultsofourtestingandourrelatedstatisticalprojectionsarepresentedinFigure6,below.
Figure6:Woman‐ownederrors,projectederrorrates,andupperlimitsoferrorrates
Product Woman‐Owned Absolute
AmountofErrors
NumbersofErrorsinSample
ProjectedErrorRates
UpperLimitsofErrorRates
LTDirectLoans* $0 0of16 0.00% 0.00%MTandLTLoanGuarantees 0 0of90 0.00% 3.38%WorkingCapitalGuarantees 51,300,000 3of139 1.14% 5.55%GlobalCreditExpress(GCE) 1,425,000 3of38 7.89% 16.05%OverallSummary $52,725,000 6of283 1.60% 4.80%*Giventherewereonly16LTdirectloansinthepopulation,wetestedallitems.Therefore,wedidnotneedtomakestatisticalprojections.Note:Projectederrorratesrepresentpointestimates;upperlimitsoferrorratesrepresentthemaximumpossibleerrorrateatthe95percentconfidencelevel.Theoverallsummaryprojectederrorratesandupperlimitsoferrorratesarebasedonoverallstatisticalprojectionsandarenotthesumofdetailedamountsforeachproduct.
Wenoted11instancesinwhichtheminority‐ownedamountrecordedinERSdifferedfromtheamountlistedintheapplication.SummaryresultsofourtestingandourrelatedstatisticalprojectionsarepresentedinFigure7,below.
11 AUDIT REPORT OIG-AR-15-07
Figure7:Minority‐ownederrors,projectederrorrates,andupperlimitsoferrorrates
Product Minority‐Owned Absolute
AmountofErrors
NumbersofErrorsinSample
ProjectedErrorRates
UpperLimitsofErrorRate
LTDirectLoans* $0 0of16 0.00% 0.00%MTandLTLoanGuarantees 4,992,000 1of90 0.68% 4.05%WorkingCapitalGuarantees 38,700,000 4of139 2.38% 9.67%GlobalCreditExpress(GCE) 2,670,000 6of38 15.79% 24.69%OverallSummary $46,362,000 11of283 3.41% 6.95%*Giventherewereonly16LTdirectloansinthepopulation,wetestedallitems.Therefore,wedidnotneedtomakestatisticalprojections.Note:Projectederrorratesrepresentpointestimates;upperlimitsoferrorratesrepresentthemaximumpossibleerrorrateatthe95percentconfidencelevel.Theoverallsummaryprojectederrorratesandupperlimitsoferrorratesarebasedonoverallstatisticalprojectionsandarenotthesumofdetailedamountsforeachproduct.
Inaddition,weidentifiedoneFY2014GCEauthorizationthatwasrecordedinERSasminority‐owned,butwasnotsupportedbyEx‐ImBank’sdocumentation.However,Ex‐ImBankmanagementprovidedthird‐partyevidencethatthisauthorizationwasrecordedcorrectlyasminority‐ownedinresponsetoourquestions.Thisthird‐partyinformationwasnotcontainedinEx‐ImBank’ssupportingdocumentation.Inaccuratesmallbusiness,woman‐owned,andminority‐ownedparticipationamountsincreasetheriskofunreliablereportingusedformakingdecisions.Forexample,theBankmaynotbeabletoaccuratelyrespondtocongressional,FreedomofInformationAct,andOIGrequests.Furthermore,internalandexternalreports,suchastheGPRAandAnnualReports,maynotbeaccurate.Ex-Im Bank Inaccurately Recorded Certain Primary Suppliers in ERS
WenotedinconsistentuseoftheprimarysupplierfieldinERSforMTandLTguarantees.Althoughanauthorizationcaninvolvemanysuppliers,theprimarysupplierfieldcapturesthemostsignificantsupplier.Inourstatisticalsample,weidentified12authorizationsforwhichtheprimarysupplierinERSwasincorrect.These12authorizationsrelatedtotheTransportationDivisionandinvolvedthesaleofaircrafttovariousentities.Theaircraftmanufacturerwaslistedasoneofthemultiplesuppliersontheboardmemorandumparticipantattachment;however,“VariousUSsmallbusinesses”wasrecordedastheprimarysupplierinERS.BasedontheproductdescriptionanddiscussionswithEx‐ImBankpersonnel,wedeterminedthattheaircraftmanufacturershouldhavebeenlistedastheprimarysupplierinERS.Basedonourstatisticalprojectionsoftheseresults,weare95percentconfidentthattherearenomorethananadditionalfiveerrors(foratotalof17possibleerrors)inthepopulation.WedidnotidentifysimilarerrorsforLTdirectloans,workingcapitalguarantees,orGCEs.ImproperrecordingofprimarysupplierinformationreducesthereliabilityofERSdataformanagement’sanalysisandreporting.
12 AUDIT REPORT OIG-AR-15-07
Recommendations, Management’s Response, and Evaluation of Management’s Response
Recommendations:
WerecommendthattheChiefFinancialOfficer,ChiefBankingOfficer,andChiefRiskOfficer:
1. ReviewEx‐ImBank’sprocessforrecordingandreviewingthefollowingdatafieldsinERStodeterminehowthesespecificerrorsoccurred;correcttheerrors;andrevisetheprocessasappropriate:
a. Authorization,disbursements,andrepayments;b. Smallbusiness,woman‐owned,andminority‐ownedamounts;andc. Primarysupplier.
2. Conductacomprehensivereviewusingsourcedocumentationtodetermine
whetherthecurrently‐recordedERSdataareaccurateandsupported,andmakenecessarycorrectionsinthepopulationforthefollowingdatafields:
a. Disbursementsandrepayments;andb. Smallbusiness,woman‐owned,andminority‐ownedamounts.
Management’sResponse:
Ex‐ImBankManagementconcurredwithbothrecommendationsandstateditwillcorrectthe44identifiederrors,reviewthecauseoftheerrors,andrevisetheprocessesorprocedures,asappropriate.Inaddition,managementstateditwouldconductacomprehensivereviewtodeterminewhetherthecurrently‐recordedERSdataareaccurateandsupported.Managementalsoplanstoestablishaworkinggrouptoaddressthisrecommendation.
OurEvaluationofManagement’sResponse:
Ex‐ImBankManagement’sproposedactionsareresponsivetotherecommendations.Therefore,therecommendationsareconsideredresolvedandwillbecloseduponcompletionandverificationoftheproposedactions.
Finding 2: Ex-Im Bank’s OCFO Did Not Provide Documentation on a Timely Basis
TheBank’sOCFOdidnotprovideERSdataandrelatedsourcedocumentationonatimelybasis.Withoutmanagement’scooperation,itisdifficulttoconductanefficientauditandobtainsufficientappropriateauditevidencetoprovideabasisforfindingsandconclusions.Forexample,onMarch26,2015,priortothestartofouraudit,weinformedtheOCFOmanagementthatwewouldneedtoobtainERSdataforFY2014andQ1andQ2ofFY2015.TheOCFOpromptlyprovidedtheFY2014dataonApril7.Duringtheentranceconference
13 AUDIT REPORT OIG-AR-15-07
heldonApril17,theOCFOexplainedthattheFY2015datawouldbeavailableinERSwithinafewdays.WefolloweduponApril22andafteradditionalfollow‐upemails,wefinallyreceivedtheERSdataforQ1andQ2ofFY2015onMay7,approximatelyfiveweeksaftertheinitialrequestandmorethantwoweeksaftertheOCFOstatedtheinformationwouldbeavailableinERS.Inaddition,ittookmorethansixweekstoobtaintheinformationneededtovalidatethecompletenessoftheFY2015Q1andQ2populationandittookmorethannineweekstoreceivecertaindisbursementandrepaymentinformation.Althoughweultimatelywereabletoobtainsufficientinformationwiththeexceptionofworkingcapitalguaranteedisbursements,thedelaysincreasedauditcostsanddelayedreportingofresults.ThedelaysweencounteredonthisperformanceauditimpededOIG’sabilitytocarryoutitsauthoritiesandprovidethenecessaryoversighttoservethepublicinterest.TheOCFOcommunicateditscompetingpriorities,includingcontinuedFMS‐NGimplementationactivities,whichwereOCFO’sprioritiesbasedoninstructionsitsaiditreceivedfromtheBank’sChairmanandChiefRiskOfficer.TheOCFOindicatedthatitdidnotrealizetheextenttowhichFMS‐NGactivitieswouldimpactitsabilitytorespondtoauditrequests.TheOCFOalsonotedthatpreparationforcongressionalhearingswasasecondaryreasonforthedelays.Weconsideredtheseotherprioritiesbyinitiallyrequestingonlyinformationthatshouldbereadilyavailableandadjustingduedates.Nevertheless,theOCFOwasunabletohandletheconcurrentpriorities,andwestillencountereddelaysandmissedauditdeadlines.However,wefoundthattheBusinessCredit,OperationsandDataQuality,andTransportationDivisionswereresponsivetoourrequestsforinformationthroughouttheaudit.Theseofficesprovidedsupportforthetestedtransactions,walkedusthroughthesupportingdocumentationforexampletransactions,andwereavailabletoanswerquestionsthataroseduringourreviewsofsourcedocumentation.GAO’sStandardsforInternalControlintheFederalGovernment(1999)statesthatalldocumentationandrecordsshouldbeproperlymanagedandmaintained.Thismeansthatdocumentationandrecordsshouldbereadilyavailableandlocatable.Moreover,anOctober23,2014,letterfromChairmanandPresidentFredP.HochbergremindsEx‐ImBankemployeesandcontractorstoberesponsivetoauditrequests.Inaddition,theBankissuedarelatedpolicy,GC‐2014‐002,PolicyonCooperationwiththeOfficeofInspectorGeneral,whichstatesthat“AllemployeesareexpectedtocooperatewithofficialsandemployeesoftheOIGbyfullyprovidinginformationandbyprovidingassistanceandsupportasisneededfortheOIGtoproperlycarryouttheprovisionsoftheIGAct.”1
1 The Inspector General Act of 1978 (P.L. 95‐452), as amended in 2002 (P.L. 107‐189) established an independent Office of Inspector General within EXIM.
14 AUDIT REPORT OIG-AR-15-07
Recommendation, Management’s Response, and Evaluation of Management’s Response
Recommendation:
WerecommendthattheChiefFinancialOfficerandChiefRiskOfficer:
3. Communicatetostafftheimportanceofprovidingdatatoauditorsonatimelybasisandtakeactionstomanageconcurrentprioritiesandconsistentlyadheretodeadlinesandauditmilestonestohelpensuresuccessfulcompletionofauditsandtimelyissuanceofauditreports.
4. Reviewtheproceduresforstoringandretrievingdatasothatdataarereadilyretrievableforbothmanagementneedsandforreviewbyauditors.
Management’sResponse:
Ex‐ImBankmanagementconcurredwithbothrecommendations.ManagementstatedthattheCFOwillcommunicatetostafftheimportanceofmeetingauditdeadlinesandrequirestafftoprovidewrittennotificationtotheCFOincaseswherethereareissuesmeetingauditdeadlines.Inturn,notificationwillthenbeprovidedtotheOIG.Inaddition,Ex‐ImBankmanagementstatedthattheCFOwillrecirculatetheOctober23,2014,letterfromtheChairmanoftheBankandthePolicyonCooperationwiththeOIG.Finally,managementstateditwouldreviewproceduresforstoringandretrievingdatasothatdataarereadilyretrievable.ManagementnotedthatitgenerateddataforourauditfromatestenvironmentduringFMS‐NGimplementation,butthatithasresolvedimplementationissuesandthatstoringandretrievingdataisnolongeranissue.
OurEvaluationofManagement’sResponse:
Ex‐ImBankmanagement’sproposedactionsareresponsivetotherecommendations.Therefore,therecommendationsareconsideredresolvedandwillbecloseduponcompletionandverificationoftheproposedactions.
15 AUDIT REPORT OIG-AR-15-07
Appendix A: ERS Fields Tested Aspartofouraudit,wetestedinformationrecordedinERSforthefollowinglistoffields:
AuthorizationFiscalYear
AuthorizationDate
DealSubmittedDate
DealProgramDescription
CurrentBudgetCostLevel(riskrating)
InitialBudgetCostLevel(riskrating)
TermCode
PrimaryApplicantName
PrimaryBorrowerName
PrimarySupplierName
PrimaryExporterName
PrimaryBuyerName
PrimaryExportProductDescription
LifetoDateClaimTotalPaidAmount
LifetoDateAuthorizationAmount
LifetoDateSmallBusinessAuthorizationAmount
LifetoDateMinority‐OwnedAuthorizationAmount
LifetoDateWoman‐OwnedAuthorizationAmount
LifetoDateDisbursements/Shipments
DisbursementDate
LifetoDateOutstandingExposureAmount
LifeToDateRepaid
RepaymentDate
APPENDIX A
16 AUDIT REPORT OIG-AR-15-07
Appendix B: Management Comments
APPENDIX B
17 AUDIT REPORT OIG-AR-15-07
18 AUDIT REPORT OIG-AR-15-07
The Chief financial Officer ("CFO'") will talce the following acnons co communicate to staff the unportance of providing timely information to the duditor,,. First, the CFO wilJ circulate an email to stnffinforming them of the imponance of mocting audit deadlines. As staff'>trivcs to meet those deadlines of the OIG issues may arise. If this is the case, staff must document issues in wnnng aod notify the CFO. Written notificati<>n will be submitted to the OIG. Second, the CFO will recirculate the October 23, 2014 letter from the Chairman of the Bank and the Policy on Cooperation with the OIG, reminding staff to respond and cooperate fully with 010 officials.
Rccommcndotion 4: ReYtCY. the procedures for storing and retrie' ing data so that data are readily retrievable for both ntarul£ement needs and for review by auditors
Managemen1 Rcsoonse: The Bank concurs with this rccom.mendALion.
The Bank will n:view the procedures for storing a11d retrieving dl11a so tha.l data are readily retrievable for both management needs and for revie"' by auditon. It is important to note that the auditors requested data for this audit that wus in a test environment, ~•th the implementauon of the new financial management system still being ruconc:iled, tested and validated. With post implemenution issues Y.Orl<cd out, storing and retneving data is DO longer an issue. On June 15, 2015, the Bank released FY 2015 daUI.
We thank the OIG for your efforts to ensure the: Bank's policies and procedures continue to unprove, as well as die work you do with us to protect Ex-Im funds from fraud, waste. and abuse. We look forward to strengthening our "-Orking rcl:itionship and continuing to work closely with the Office of the Inspector Genernl.
Sincerely.
Charles J Hall Executive V1oe President ond Chief Risk Officer Export-Import Bank of the United Statl!S
3
19 AUDIT REPORT OIG-AR-15-07
To Report Fraud, Waste, or Abuse, Please Contact:
Email: [email protected]
Telephone: 1‐888‐OIG‐Ex‐Im(1‐888‐644‐3946)
Fax: (202)565‐3988
Address: OfficeofInspectorGeneral Export‐ImportBankoftheUnitedStates 811VermontAvenue,NW Suite138 Washington,DC20571
Comments and Suggestions IfyouwishtocommentonthequalityorusefulnessofthisreportorsuggestideasforfutureauditspleasecontactTerrySettle,ActingAssistantInspectorGeneralforAudits,[email protected](202)565‐3498.Comments,suggestions,andrequestscanalsobemailedtotheattentionoftheAssistantInspectorGeneralforAuditsattheaddresslistedabove.
Foradditionalinformation,contacttheOfficeoftheInspectorGeneralat(202)565‐3908orvisitwww.exim.gov/oig.
Office of Inspector General Export-Import Bank of the United States 811 Vermont Avenue, NW Washington, DC 20571 202-565-3908 www.exim.gov/oig