Annual Plan Fiscal Year 2020 OIG-CA-20-008 Office of Inspector General Department of the Treasury Foreword This annual plan outlines the fiscal year (FY) 2020 Department of the Treasury (Treasury or the Department) Office of Inspector General (OIG) audit and investigative priorities. The planned work focuses on Treasury’s major initiatives and challenges, and takes into consideration OIG’s Strategic Plan for Fiscal Years 2018–2022. As this plan illustrates, we have prioritized our resources to provide oversight of the most significant and highest-risk Treasury programs and operations across our jurisdictional boundaries. For FY 2020, our oversight efforts will place top priority on: (1) operating in an uncertain environment; (2) cyber threats, (3) anti- money laundering/terrorist financing and Bank Secrecy Act enforcement, (4) efforts to promote spending transparency and to prevent and detect improper payments, and (5) information technology acquisition and project management. Areas of emphasis for FY 2020 include oversight mandated by law such as the Inspector General Act of 1978, as amended, the Government Management Reform Act of 1994, the Federal Information Security Modernization Act of 2014, the Federal Deposit Insurance Act, and the Improper Payments Elimination and Recovery Act of 2010. Additionally, we will continue to perform audit work related to Treasury’s responsibilities under the Digital Accountability and Transparency Act of 2014. The projects described in this plan address areas of known and emerging risk and vulnerabilities. As in the past, we encourage Department and bureau management to use this plan for areas of self-assessment. October 2019 Treasury Office of Inspector General Annual Plan—Fiscal Year 2020 i This page intentionally left blank. Contents F o r e w o r d ........................................................................ i O v e r v i e w ....................................................................... 1 Mission Statement ..................................................................................................................................... 1 Background ............................................................................................................................................... 1 Organizational Structure and Fiscal Resources ........................................................................................ 1 Performance Measures ............................................................................................................................. 2 Fiscal Year 2020 Priorities ........................................................................................................................ 3 Management and Performance Challenges ........................... 12 In Progress and Planned Projects by Treasury OIG ............... 13 I s s u e A r e a .................................................................... 13 Treasury General Management and Infrastructure Support: Financial Management .......................... 13 Treasury General Management and Infrastructure Support: Cybersecurity/Information Technology .. 18 Treasury General Management and Infrastructure Support: Resource Management ......................... 25 Treasury General Management and Infrastructure Support: Procurement .......................................... 41 Anti-Money Laundering/Terrorist Financing and Foreign Assets Control ............................................. 46 Government-wide Financial Services and Debt Management ............................................................. 63 Financial Regulation and Oversight ..................................................................................................... 78 Alcohol and Tobacco Revenue Collection and Industry Regulation ..................................................... 85 Bill and Coin Manufacturing ................................................................................................................. 92 Domestic and International Assistance Programs ............................................................................... 99 Gulf Coast Restoration ...................................................................................................................... 112 Small Business Lending Fund Program ............................................................................................. 120 Appendix A: Office of Audit FY 2020 Resource Allocation .... 1 2 3 Appendix B: Index of In Progress and Planned FY 2020 Audits, by Bureau/Office .......................................................... 1 2 6 Abbreviations .............................................................. 1 3 2 This page intentionally left blank. Overview M i s s i o n S t a t e m e n t The Department of the Treasury (Treasury or the Department) Office of Inspector General (OIG) conducts independent and objective audits and investigations to promote integrity, efficiency, and effectiveness in programs and operations across its jurisdictional boundaries. B a c k g r o u n d In 1989, the Secretary of the Treasury established the OIG in accordance with 1988 amendments to the Inspector General Act. Treasury OIG has the following responsibilities: Conduct and supervise audits and investigations of Treasury programs and operations except for the Internal Revenue Service, which operates under the jurisdictional oversight of the Treasury Inspector General for Tax Administration, and the Troubled Asset Relief Program, which operates under the jurisdictional oversight of a Special Inspector General. Provide leadership and coordination of policies that (1) promote economy, efficiency, and effectiveness in Treasury programs and operations, and (2) prevent and detect fraud and abuse in Treasury programs and operations. Keep the Secretary of the Treasury and Congress fully and currently informed about problems and deficiencies in Treasury programs and operations. Treasury OIG also has audit and investigative oversight for both the Gulf Coast Ecosystem Restoration Council (Council), an independent Federal entity, and the Gulf Coast Ecosystem Restoration Science, Observation, Monitoring, and Technology Program (Science Program), which is administered by the National Oceanic and Atmospheric Administration under the U.S. Department of Commerce. Organizational Structure and Fiscal Resources Treasury OIG is headed by an Inspector General appointed by the President with the advice and consent of the Senate. As shown below, Treasury OIG’s organization includes four offices headquartered in Washington, DC; an audit field office in Boston, Massachusetts; and investigative offices in Greensboro, Treasury Office of Inspector General Annual Plan—Fiscal Year 2020 1 Overview North Carolina (home to the North Carolina Treasury Financial Crimes Task Force); and Jacksonville, Florida. Inspector General Office of Office of Office of Office of Audit Investigations Counsel Management For fiscal year (FY) 2020, the President requested approximately $37.0 million in direct appropriations for Treasury OIG. Up to $2.8 million of that total is to be available for audits and investigations conducted pursuant to Section 1608 of the Resources and Ecosystems Sustainability, Tourist Opportunities, and Revived Economies of the Gulf Coast States Act of 2012 (RESTORE Act). Audits and investigations of the Small Business Lending Fund (SBLF) are funded on a reimbursable basis by the SBLF program office. Annual financial statement audits of Treasury and certain components are funded by the annual salaries and expenses appropriation for Treasury’s Departmental Offices. Performance Measures Treasury OIG established the following FY 2020 performance measures for the Offices of Audit and Investigations: Office of Audit Performance Measures Complete 74 audit products. Complete 100 percent of mandated audits by the required date. Identify monetary benefits where appropriate. Office of Investigations Performance Measure Ensure 80 percent of investigative work product is referred (1) for civil or criminal prosecution or (2) administratively to a Treasury bureau or office for appropriate action. Treasury Office of Inspector General Annual Plan—Fiscal Year 2020 2 Overview F i s c a l Y e a r 2 0 2 0 P r i o r i t i e s Audit Priorities Treasury OIG established three audit priorities for FY 2020: Priority 1 Audit Products Mandated by Law Treasury OIG allocates significant resources to meet mandated audit requirements, which include (1) audited financial statements and financial-related review work; (2) information systems security; (3) Treasury programs authorized by the Small Business Jobs Act of 2010; (4) bank failures, pursuant to requirements in the Federal Deposit Insurance Act; (5) responsibilities under the Digital Accountability and Transparency Act of 2014 (DATA Act); and (6) the effectiveness of measures taken by Customs and Border Protection to protect revenue as required under Section 112 of the Trade Facilitation and Trade Enforcement Act of 2015. We also perform work in response to congressional directives and support the Council of Inspectors General on Financial Oversight (CIGFO)1 by leading or participating on working groups established to evaluate the effectiveness and internal operations of the Financial Stability Oversight Council. Priority 2 Work Requested by Treasury Management, Congress, or Other External Sources Treasury OIG typically receives four or five requests each year from Treasury management or Congress to perform