Consumer Financial Protection Bureau officials don’t know how much they are actually spending or whether they are getting good value when they buy such things as computer software and office equipment, according to a congressional watchdog.
The CFPB was created by Congress and President Obama four years ago to help consumers better understand and use sometimes complicated financial resources, but a new Government Accountability Office review has found for a second straight year serious deficiencies in the bureau’s stewardship of its own budget.
“Specifically, we found that CFPB did not have effective procedures in place to determine and record an appropriate amount for goods and services received but not yet paid for as of Sept. 30, 2014,” GAO said in its review of the bureau’s financial statements.
“Additionally, CFPB did not have effective review procedures to timely detect and correct inaccuracies in the accrual amounts” paid and owed “for goods and services received relating to contracts and property and equipment acquisitions that have not been paid.”
The amounts involved have increased 75 percent in one year, rising from $32 million in 2013 to $56 million in 2014, according to GAO, which added that “these control deficiencies collectively represent a material weakness in CFPB’s internal control over reporting of accounts payable.”
Despite agreement from CFPB officials when GAO pointed out the problem before, auditors said the bureau still isn’t moving quickly enough to fix it.
“Because CFPB continues to grow as an agency, which has resulted in higher volumes of transactions each year, it is imperative that it address these issues in an effective and timely manner,” GAO said.
Similarly, GAO said it pointed out CFPB’s failure to account properly for property acquired by the bureau in 2013, but the problems continued in 2014.
“These deficiencies increase the risk that CFPB’s reported balances for property and equipment as well as its reported expenses could be misstated, and collectively represent a significant deficiency in CFPB’s internal control over its accounting for property and equipment that merits attention by those charged with governance,” GAO said.
The GAO auditors cautioned that the problems they described “may adversely affect any decisions by CFPB’s management that are based, in whole or in part, on information that is inaccurate” in the bureau’s 2014 financial report.
The bureau has been controversial from its inception in 2011. As the Washington Examiner has reported, the controversies have included the bureau’s databases containing billions of bytes of private financial information about Americans’ mortgages and credit cards.
In addition, the bureau has refused in all but one instance to follow the same rules requiring defendants and plaintiffs in federal court cases to submit to depositions.
A federal judge told CFPB to do such depositions even if doing so was an annoyance, as bureau officials had claimed in court filings.
Go here for the full GAO report.
Mark Tapscott is executive editor of the Washington Examiner.
