Page 28 - Financial Report 2020

PRIVACY AND CIVIL LIBERTIES OVERSIGHT BOARD

Financial Summary and Highlights

Sound financial management is integral to the execution of PCLOB’s mission. The following
pages provide a summary and overview of the financial position of the Board and
highlights some of the most significant financial achievements carried out, as well as some
financial management challenges, during FY 2020.

Audited Agency Financial Statements, FY 2018 to FY 2020

Although the agency’s first financial audit of the FY 2018 financial statements found no
fraud, waste, or abuse, the independent auditors identified five material weaknesses in the
Board’s internal controls over various financial processes, resulting in the auditor’s
inability to provide an audit opinion over the FY 2018 financial statements. The Board
viewed its first audit as the first step in a process of self-evaluation and continual
improvement, with the goal of achieving the highest attainable standards of federal
financial management. The extensive list of audit recommendations and findings provided
the Board’s small staff (which at the time consisted of only ten full-time employees, only
two of which represented the finance team), with not only a list of challenges to overcome
but great motivation to strengthen the agency’s financial management in the process.

Due to the diligence of the Office of the Chief Financial Officer (“OCFO”) to respond to the
FY 2018 audit findings and recommendations, the agency’s second audit of its financial
statements concluded in April 2020, resulting in an unmodified opinion over the FY 2019
financial statements, with no new audit findings and no required audit adjustments. An
unmodified opinion provides reasonable assurance that the financial statements are free of
material misstatement. Reasonable assurance, while not absolute, is nonetheless a high
level of assurance.

As evidence of the Board’s continued efforts towards strong financial management, the
agency’s third audit over the financial statements in FY 2020 resulted in an unmodified
audit opinion for the second consecutive year. The FY 2020 audit report, included in the
“Financial Information” section of this report, noted no material weaknesses or significant
deficiencies, a remarkable feat for the agency. The Board acknowledges these significant
accomplishments as a testament to its commitment to achieving excellence despite the
agency’s small size.

CHALLENGES TO OUR FINANCIAL MANAGEMENT

Transitions to New Service Providers

In FY 2020, the PCLOB’s pursuit of better value for taxpayer dollars brought three new
contracts with shared service providers for payroll, financial, and procurement services.
The time and effort expended by the Chief of Human Capital Officer, Chief Financial Officer,
and Budget Officer was significant, as both the procurement process and the migration
process required extensive coordination with both old and new service providers to ensure

FY 2020 AGENCY FINANCIAL REPORT 19