Agency financial report Fiscal Year 2018

2018·6.6 MB·English

by  United States. Department of the Interior

UNITED STATES DEPARTMENT OF THE INTERIOR
A g e n c y
Fi n a n c i a l
R e p o r t
FY 2018
U.S. Department of the Interior
https://www.doi.gov/pfm/afr
U. S . D E PA R TM E N T
I N T E R I O R
OF THE
FISCAL YEAR 2018
AGENCY FINANCIAL REPORT
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AGENCY FINANCIAL REPORT  FY 2018
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TABLE OF CONTENTS
Introduction........................................................................1
Message from the Secretary ..........................................................1
About This Report ...................................................................3
Section 1: Management’s Discussion and Analysis ......................................5
Mission and Organizational Structure...................................................5
Analysis of Performance Goals and Results .............................................11
Analysis of Systems, Controls, and Legal Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
Statement of Assurance ....................................................18
Analysis of Financial Statements .................................................25
What’s Ahead – A Forward Look..................................................33
Section 2: Financial Section .........................................................37
Office of Inspector General Transmittal............................................37
Independent Auditors’ Report ...................................................39
Response to Independent Auditors’ Report ........................................44
Principal Financial Statements...................................................45
Consolidated Balance Sheet .................................................46
Consolidated Statement of Net Cost ..........................................47
Consolidated Statement of Changes in Net Position .............................49
Combined Statement of Budgetary Resources ..................................50
Consolidated Statement of Custodial Activity...................................51
Notes to Principal Financial Statements ...........................................52
Required Supplementary Information ...........................................108
Required Supplementary Stewardship Information ................................123
Section 3: Other Information.......................................................128
Summary of Inspector General’s Major Management and Performance Challenges .....128
Summary of Financial Statement Audit and Management Assurances ................164
Payment Integrity ............................................................166
Fraud Reduction Report .......................................................168
Reduce the Footprint..........................................................170
Civil Monetary Penalty Adjustment for Inflation ...................................171
Grants Oversight and New Efficiency (GONE) Act ..................................175
Glossary of Acronyms .........................................................176
We Would Like to Hear From You....................................................179
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MESSAGE FROM THE SECRETARY
The Department of the Interior’s (DOI) Agency Financial
Report (AFR) is the latest reflection of our dedication
to stewardship. Over the last year, we have worked
hard to restore the public’s trust in the Government,
engaging the local citizens affected by the decisions we
make. Once again, rural America has a seat at the table
– with Donald J. Trump in the White House, the voices of
countless citizens are now heard in our Nation’s capital.
Interior has a large portfolio. It stretches across 12 time
zones, from the Virgin Islands to Palau, overseeing
one-fifth of our Nation’s territory. Across our Country,
this system of public lands is the envy of the world.
Interior also upholds the Federal Government’s trust
responsibilities to 573 federally recognized Tribes and
works with Western States to manage water.
The AFR provides measurable results of DOI programs,
the status of DOI’s compliance with certain legal and
regulatory requirements, and information on the steps
DOI is taking to improve its financial performance and
management. The AFR presents the audited financial
statements, results of the annual assessment of program leadership, and stewardship of the
resources and public funds entrusted to DOI. It also provides a comprehensive snapshot of the most
important financial information related to the programs DOI manages as well as a brief preview
of performance information. The Annual Performance Plan and Report to be issued with the 2020
President’s budget will provide a more comprehensive account of performance, in accordance with
the Government Performance and Results Modernization Act of 2010.
In Fiscal Year (FY) 2018, I am proud to report DOI’s 22nd consecutive unmodified audit opinion.
The financial statement audit conducted by an independent audit firm did not identify any material
weaknesses over financial reporting. The DOI remediated two significant deficiencies related to
Controls over Accounts Payable and Controls over General Information Technology. In FY 2019,
DOI is committed to addressing the one remaining significant deficiency related to Controls over
General Property, Plant, and Equipment highlighted in the FY 2018 Independent Auditor’s Report.
In addition, we achieved a completion rate of 89 percent for successfully addressing the FY 2018
planned corrective actions related to the Office of Inspector General and Government Accountability
Office audit recommendations as compared to the DOI goal of 85 percent.
As required by the Federal Managers’ Financial Integrity Act of 1982 and reported in the FY 2018
Assurance Statement, I am able to provide reasonable assurance that DOI’s internal controls are
effective, with the exception of one operational material weaknesses identified by management
related to the Management of Grants, Cooperative Agreements, and Tribal Awards.
As America’s economy has grown under President Trump, our Nation has also taken steps toward
the President’s goal of American energy dominance. Our “all-of-the-above” approach to energy
has leveraged America’s natural resource abundance – from traditional to alternative sources – to
the benefit of all Americans. Domestic energy production creates a safer, freer, wealthier, and more
sovereign America.
AGENCY FINANCIAL REPORT  FY 2018 INTRODUCTION
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MESSAGE FROM THE SECRETARY
When it comes to regulation, we are incorporating industry innovation, best science, and best
practices to ensure reliability, safety, and environmental stewardship. Consistency in regulation is one
way that Interior is moving toward being a better partner with industry. Regulation should not be
punitive, nor should we be adversarial to the American innovation that made our Country great in
the first place.
Conservation on our lands, in the tradition of multiple use, will be our greatest legacy. Americans
should be able to access their lands, and the words engraved into the Roosevelt Arch in Yellowstone
National Park that public land is “For the Benefit and Enjoyment of the People,” serve as a guiding
light for our stewardship. Land should be managed for the greatest good in the longest term, just as
conservationists like President Theodore Roosevelt and Gifford Pinchot advocated.
To ensure that future generations can enjoy the great outdoors, we are prioritizing public lands
infrastructure. For many years, a backlog of deferred maintenance across Interior-managed lands
has negatively impacted the visitor experience. Broken water pipes, unpaved roads, and moldy
bathrooms in the national parks have become the symbols of our leaders’ neglect of infrastructure.
But President Trump is a builder, and I am confident that our dilapidated public lands infrastructure
is a problem we can solve.
In the coming year, we will also modernize our organization and infrastructure for the next 100 years
through our reorganization of DOI. Set against the backdrop of President Trump’s Government-
wide reorganization, we are advancing a modern vision of Interior that prioritizes the front
lines. Consolidating our dozens of regional Bureau boundaries into 12 common, unified regional
boundaries is good Government, and streamlining our operations will save taxpayer money and
better serve the American people.
Looking forward, I am bullish about Interior and America’s future. We have an exceptional Country
– with pristine lands, vast natural resources, diverse wildlife, and great people – and it is an honor
to serve as Secretary of the Interior. As we continue to achieve energy dominance, establish a
conservation legacy, rebuild our American infrastructure, and reorganize Interior, I know that we
will accomplish great things as one American people working together.
God bless America.
Sincerely,
Ryan K. Zinke
Secretary of the Interior
November 15, 2018
INTRODUCTION AGENCY FINANCIAL REPORT  FY 2018
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AGENCY FINANCIAL REPORT FY 2018
ABOUT THIS REPORT
The U.S. Department of the Interior’s (DOI) Agency Financial Report (AFR) for fiscal year (FY) 2018 provides
performance and financial information that enables Congress, the President, and the public to assess the
performance of DOI relative to its mission and stewardship of the resources entrusted to it. This AFR satisfies
the reporting requirements of the following:
uuFederal Managers’ Financial Integrity Act of 1982;
uuChief Financial Officers Act of 1990;
uuGovernment Management Reform Act of 1994;
uuReports Consolidation Act of 2000;
uuOffice of Management and Budget Circular No. A-136, Financial Reporting Requirements;
uuImproper Payments Elimination and Recovery Improvement Act of 2012;
uuOffice of Management and Budget Memorandum M-12-12, Promoting Efficient Spending to
Support Agency Operations; and
uuFraud Reduction and Data Analytics Act of 2015.
The DOI chooses to produce the AFR rather than the alternative Performance and Accountability Report.
The annual performance report, with detailed performance information that meets the requirements
of the Government Performance and Results Act Modernization Act of 2010 (GPRAMA), will be provided
within the Annual Performance Plan and Report (APP&R), www.doi.gov/ performance/performance-
reports, to be transmitted with the release of the FY 2020 Congressional Budget Justification. A Summary
of Performance and Financial Information is also produced that summarizes AFR information in a brief, user
friendly, format. The AFR may be viewed online at https://www.doi.gov/pfm/afr.
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AGENCY FINANCIAL REPORT FY 2018 INTRODUCTION
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AGENCY FINANCIAL REPORT FY 2018
CERTIFICATE OF EXCELLENCE IN ACCOUNTABILITY REPORTING
For the sixteenth year, DOI received a Certificate of Excellence in Accountability Reporting (CEAR©) award
for the FY 2017 AFR. The Association of Government Accountants CEAR© Program has been helping
Federal Agencies produce high-quality Agency Financial Reports and Performance and Accountability
Reports since 1997. The program was established in conjunction with the Chief Financial Officers Council
and the U.S. Office of Management and Budget (OMB) to improve financial and program accountability
by streamlining reporting and improving the effectiveness of such reports.
The DOI is honored to have received this prestigious award and is fully committed to excellence in
financial reporting and providing a comprehensive understanding of DOI’s fiscal and programmatic
accomplishments.
Certificate of Excellence in
Accountability Reporting®
presented to the
U.S. Department of the Interior
in recognition of outstanding effort in preparing the
Agency Financial Report for fiscal year 2017
Diane L. Dudley, CGFM, CPA
Chair, CEAR Board
Ann M. Ebberts, MS, PMP
Chief Executive Officer, AGA
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