USDA RD Earns an Unqualified Financial Statement Audit Opinion
USDA RD earned an unqualified financial statement audit opinion as a direct result of FI Consulting’s credit subsidy reestimate work.
Client: U.S. Department of Agriculture
Challenge: Financial statement auditors at U.S. Department of Agriculture Rural Development (USDA RD) issued a qualified opinion on the department’s financial statements when they were unable to assess the presentation of USDA RD’s credit subsidy reestimates, due to material weaknesses in credit reform modeling. To address this, and to mitigate audit risks stemming from the development of new, not yet audited credit subsidy reestimate models, USDA RD hired FI Consulting.
FI Solution: FI worked with USDA RD’s Budget Division to perform credit subsidy reestimates for more than 30 of its largest credit programs, with origination volumes greater than $40 billion. We evaluated USDA RD’s existing processes and tools, created additional Visual Basic for Applications tools and control procedures to streamline reestimate operations, and then recommended process and tool improvements.
Our team conducted sensitivity, decomposition, and other analyses to thoroughly explain reestimate results and supported the results through Office of Management and Budget (OMB) and financial statement auditor review. After performing credit subsidy reestimates, FI provided USDA RD staff with a methodological framework and training for validating model inputs, reestimate results, and explaining reestimate results.
FI Impact: USDA RD earned an unqualified financial statement audit opinion as a direct result of FI’s credit subsidy reestimate work. In addition, USDA RD implemented FI’s methodological framework for reestimate validation and our recommendations for enhancements to reestimate tools and controls. As a result, USDA RD is able to validate and explain reestimate results, reduce errors, and substantially reduce the time required to perform credit subsidy reestimates.