Internal

KPMG LLP (KPMG), under contract with the Department of Homeland Security Office of Inspector General, conducted an integrated audit of DHS’ fiscal year 2021 consolidated financial statements and internal control over financial reporting.  KPMG issued an unmodified (clean) opinion on the financial statements, reporting that they present fairly, in all material respects, DHS’ financial position as of September 30, 2021.  However, KPMG identified material weaknesses in internal control in two areas and other significant deficiencies in four areas.  Consequently, KPMG issued an adverse opinion on DHS’ internal control over financial reporting.  KPMG also reported noncompliance with two laws and regulations.  KPMG made 19 recommendations to improve the Department’s internal control over financial reporting.

Based on our recent and prior audits, inspections, special reviews, and investigations, we consider the most serious management and performance challenges currently facing DHS to be: (1) Managing Programs and Operations Effectively and Efficiently during times of Changes in Leadership, Vacancies, Hiring Difficulties; (2) Coordinating Efforts to Address the Sharp Increase in Migrants Seeking to Enter the United States through our Southern Border; (3) Ensuring Cybersecurity in an Age When Confidentiality, Integrity, and the Availability of Information Technology Are Essential to Mission Operations; (4) Ensuring Proper Financial Planning, Payments, and Internal Controls; and (5) Improving FEMA’s Disaster Response and Recovery Efforts.  Addressing and overcoming these challenges requires firm leadership; targeted resources; and a commitment to mastering management fundamentals, data collection and dissemination, cost-benefit/risk analysis, and performance measurement. 

Annual report, Major Management and Performance Challenges Facing the Department of Homeland Security. Pursuant to the Reports Consolidation Act of 2000, the Office of Inspector General is required to issue a statement that summarizes what the Inspector General considers to be the most serious management and performance challenges facing the agency and briefly assess the agency’s progress in addressing those challenges. We acknowledge past and ongoing efforts by Department’s senior leadership to address the challenges identified in this report. At the same time, our aim in this report is two-fold ― to identify areas that need continuing focus and improvement and to point out instances in which senior leadership’s goals and objectives are not executed throughout the Department. We highlight persistent management and performance challenges that hamper the Department’s efforts to accomplish the homeland security mission efficiently and effectively.