The DOL 2010 Annual Financial Statements contain the following excerpt within the "Message from the Chief Financial Officer" (page 31).
"The U.S. Department of Labor implemented a new core financial management system this year to increase productivity and reduce costs when processing financial transactions and preparing financial reports....
As a consequence of converting to the New Core Financial Management System, the auditors were unable to complete a full examination of the Department’s FY 2010 financial statements. Difficulties with the timely
migration of data from the legacy system delayed the new system’s audit readiness, imposing limitations on the auditors’ scope of work which caused the Inspector General to withhold an opinion on the Department’s FY 2010 financial statements.
A clean audit opinion provides independent confirmation that the Department’s financial statements are presented fairly and in conformity with generally accepted accounting principles. Accurate and timely financial information improves the DOL’s accountability to Americans and allows the department to make informed operational, budget, and policy decisions. DOL is committed to regaining the unqualified (clean) audit opinion it held for the previous 13 years."
Further detail is provided in the Independent Auditor's Report (pp. 32 - 64).
"Our consideration of internal control over financial reporting resulted in identifying certain deficiencies that we consider to be material weaknesses and other deficiencies that we consider to be significant deficiencies, as defined in the Internal Control over Financial Reporting section of this report, as follows:
1. Lack of Sufficient Controls over Financial Reporting
2. Lack of Sufficient Controls over Budgetary Accounting
3. Improvements Needed in the Preparation and Review of Journal Entries
4. Lack of Adequate Controls over Access to Key Financial and Support Systems"
"In January 2010, DOL implemented a new financial accounting and reporting system. As a result of the implementation, DOL encountered a significant number of data migration, posting, reconciliation, and reporting issues that hindered its ability to assure the accuracy and completeness of consolidated financial statement balances and to provide data necessary for audit testing.
Specifically, DOL was unable to provide sufficient evidential matter that supports certain balance sheet accounts including fund balance with Treasury, intra-governmental accounts receivable, accounts receivable, other-advances, intra-governmental accounts payable, accounts payable, accrued benefits, and the components of net position, as reported in the accompanying DOL consolidated balance sheet as of September 30, 2010. Certain of these issues also impact the statement of social insurance as of September 30, 2010."