Audit of VA’s Consolidated Financial Statements for Fiscal Years 2011 and 2010

We contracted with the independent public accounting firm, Clifton Gunderson LLP, to audit VA’s consolidated financial statements. This audit is an annual requirement of the Chief Financial Officers Act of 1990. Clifton Gunderson LLP provided an unqualified opinion on VA’s fiscal year 2011 and 2010 consolidated financial statements. With respect to internal control, Clifton Gunderson LLP identified one material weakness, information technology security controls, which is a repeat condition. They also reported two significant deficiencies, accrued operating expenses, which is a repeat condition, and loan guaranty reporting. The department has taken corrective actions sufficient to eliminate four other significant deficiencies previously cited last year. Clifton Gunderson LLP reported that VA did not substantially comply with the Federal financial management systems requirements of the Federal Financial Management Improvement Act (FFMIA) of 1996. They also noted instances of non-compliance with the Debt Collection Improvement Act of 1996.