Coast Guard Still Unable to Ballance its Books – Is the Finance Center at Fault?

The Department of Homeland Security Office of Inspector General released the Independent Auditor’s Report on Auditability Assessment of the Department of Homeland Security’s Statement of Budgetary Resources today.

During the previous DHS consolidated financial statement audits, weaknesses were identified in recording transactions related to the commitments, obligations, undelivered orders, and disbursements. During FY 2008, USCG continued its remediation efforts over the financial reporting and budgetary processes. Although improvements were made, KPMG found that many of these prior years’ conditions continue to exist and they are included in the condition below.

Condition: USCG has not designed or implemented effective policies, procedures, and internal controls, to support management’s assertions associated with the statement of budgetary resources, including opening balances and topside adjustments. With regard to the financial statement assertions, KPMG identified the following:

1.  USCG did not implement a sound methodology to establish accurate general ledger systems opening balances for fiscal year 2008. In an attempt to support their financial statements with the general ledger balances, USCG recorded mainly unsupported, summary-level topside adjustments into the Core Accounting System (CAS) prior to the FY 2007 system closes of CAS, the Aviation Logistics Management Information System (ALMIS), and the Naval Engineering Supply Support System (NESSS). The summary topside adjustments recorded into CAS included adjustments to account balances that should have been recorded in ALMIS and NESSS as well. USCG reversed the entries shortly after establishing the fiscal year 2008 opening balances, further calling into question the validity of the procedure itself. In addition, the CAS closing logic did not properly close the nominal accounts into the permanent accounts and establish proper beginning balances. USCG recorded topside journal entries to correct the closing logic deficiencies in the opening balance file submitted to DHS but did not correct the deficiencies in CAS, resulting in inaccurate opening system-level budgetary balances.

2.  USCG has not developed and implemented an effective reconciliation process at the general ledger system level to ensure that each FY 2008 system’s opening budgetary balances accurately reflect its FY 2007 closing balances. USCG’s current reconciliation is performed at the USCG TIER database level and not at the individual general ledger system level; therefore, the reconciliation does not support the overall accuracy of the general ledger systems opening balances.

3.  USCG has not fully developed and implemented procedures to validate the entire USCG UDO balance as of September 30, 2008. In addition, USCG did not timely record activity to its UDO balances, as they do not properly define a UDO. USCG only reduces a balance when a payment is made, rather than when goods/services are received/completed.

Effect: USCG’s current process is not effective to produce accurate and complete budgetary financial information for submission to DHS resulting in potentially materially misstated DHS consolidated statement of budgetary resources. The USCG TIER account balances that support the financial statements and opening balances are not supported at a transaction level and do not agree to the general ledger systems account balances. Further, manual errors have gone undetected and system issues have not been identified and corrected timely that could affect prior periods as well as multiple accounts and financial statement line items.

Cause: USCG has not designed and implemented appropriate controls over the financial reporting process to ensure that (1) opening balances are accurate and reflected in the proper general ledger system and (2) topside adjustments are valid, complete, accurate, and recorded to the proper general ledger system. Because USCG has not designed a comprehensive, integrated accounting system to comply with the FFMIA system requirements and the USSGL at the transaction level, USCG created unsuccessful workaround solutions in preparing its financial statement data rather than determining and correcting the causes of system posting logic issues. In addition, USCG has not properly analyzed analytic out-of balance conditions in its 3 general ledger systems to timely research and resolve these variances with proper supporting documentation. Further, USCG has not completed its remediation efforts over the UDO validation process, to include implementing properly designed and fully effective internal controls.

A Continuing Examination of Civil Rights Services and Diversity in the Coast Guard

The House Subcommittee on Coast Guard and Transportation will convene its second hearing on Coast Guards Civil Rights and Diversity programs on Thursday 18 June 2009 at 10:00 am.  The House will live Web Cast this hearing as it happens.  Congressman Cummings has not announced the panel from Coast Guard but one reader has suggested that the Chief of Staff of the Coast Guard, Vice Admiral Clifford I. Pearson will lead the team.  The previous hearing held on April 1st of this year left many at headquarters wishing the entire event had been a bad April Fools Day joke.  Radm. Jody Breckenridge and Ms. Terri A. Dickerson represented Coast Guard at that hearing, which left members of congress and the public asking where the answers were in their statements.

Cuff Him Coastie – Man Arrested for Boating Under the Influence

This is a great story out of 5th District that serves not only to remind the public that Boating Under the Influence is illegal, but also as a reminder to our young folks that are looking at careers in Law Enforcement to keep Coast Guard in mind.  We don’t know of any law enforcement agency in the U.S. that offers a better benefit package or retirement plan the U.S. Coast Guard.  Certainly none have the opportunity advancement, promotion, education and a chance to see the world.

PORTSMOUTH, Va. – A Station Milford-Haven boat crew put a man in handcuffs early Sunday morning for Boating Under the Influence and being belligerent near Gloucester Point, Va.

The boat crew boarded the personal craft with seven adults and one child aboard at about 10 p.m. Saturday night and found the operator to have a blood alcohol content of .195.

They proceeded to Gloucester Point boat ramp where a Gloucester Sheriff placed the man under arrest for BUI, Boating While Intoxicated and obstructing justice.

“Alot of people think Boating Under the Influence isn’t taken seriously, but it is treated just like a DUI,” said Petty Officer 2nd Class Damian Brown, the boarding officer from the Station Milford-Haven boat crew. “They need to observe the legal drinking limit while underway and should watch how much they drink regardless of whether or not they think they will be caught.”

Below are some facts about Boating Under the Influence:

• A boat operator is likely to become impaired more quickly than a driver, drink for drink.
• The penalties for BUI can include large fines, revocation of operator privileges and serious jail terms.
• The use of alcohol is involved in about a third of all recreational boating fatalities.

Statistics in Government Accountability Office report show merchant mariner rights protected in administrative law hearings

Coast Guard Report published this good news story on Coast Guards Administrative Law Judge program on 13th of June.  Headquarters Coast Guard (regular readers of The Report) picked up on the story and published this on the 15th.

WASHINGTON — The U.S. Government Accountability Office released a report Friday detailing its findings following a review of the Coast Guard’s Administrative Law Judge Program that was requested by Congress and welcomed by the Coast Guard.

The GAO conducted an independent and objective review of 1,675 suspension and revocation cases opened and closed by the Coast Guard from Nov. 10, 2005, through Sept. 30, 2008.  Analysis of those cases revealed:

• Sixty two percent of suspension and revocation cases are disposed through settlement agreements between the Coast Guard and mariners.  Click here to view or download a chart showing the disposition of all cases reviewed by the GAO.
• Roughly three percent, or just 45 cases, were disposed through a hearing before an Administrative Law Judge.
• Of those cases heard by an Administrative Law Judge, 51 percent resulted in a sanction less severe than revocation, with 13 percent resulting in no sanction at all.  Click here to view or download a chart showing the disposition of cases heard by Coast Guard Administrative Law Judges.
• Of the 1,035 cases disposed by settlement agreement, 68 percent involved stayed revocation, an agreement that allows mariner’s to regain their credentials but also allows for permanent revocation if mariners fail to meet agreed-to conditions.  Click here to view or download a chart showing the sanctions associated with cases resolved by settlement agreements.

Bath Iron Works Viewed as a Center of Excellence

In a story published by David Sharp – The Associated Press, Sharp noted that new Secretary of the Navy Ray Mabus was the latest in a line of military officials to visit General Dynamics’ Bath Iron Works.  Defense Secretary Robert Gates visited last month. Coast Guard Commandant Thad Allen was there in April. Chief of Naval Operations Gary Roughead stopped by in October. And former Navy Secretary Donald Winter visited a year ago.

Loren Thompson, a defense analyst at the Lexington Institute, said the Navy now views Bath Iron Works as its best shipbuilder.  “It’s going to get more attention because it’s viewed as a center of excellence,” Thompson said.

Makes you wonder what was going thru Admiral Thad Allen’s mind as  he took the Bath tour with Lockheed Martin in one pocket and Northrop Grumman in the other.

Coast Guards Secret Weapon on Piracy

Quietly and mostly behind the scenes, U.S. Coast Guardsmen are working at critical junctures across this “global war on piracy.” They join Navy small-boat teams, pictured, boarding and searching suspected pirate ships; oversee the evidentiary procedures when the Navy arrests pirate suspects; help forge the international legal understandings enabling the detention, prosecution and imprisonment of pirates; and lead efforts to study evolving pirate tactics and advise mariners on methods for preventing hijackings.

Read this and more at WarIsBoring by David Axe

President Obama Recognizes Civil Rights Laws at Core of Our Nation

President Obama recognizes that our civil rights laws and principles are at the core of our nation. He has spent much of his career fighting to strengthen civil rights – as a community organizer, civil rights lawyer, Illinois State Senator, U.S. Senator, and now as President. He knows that our country grows stronger when all Americans have access to opportunity and are able to participate fully in our economy.