EXPORT IMPORT BANK the UNITED STATES - exim.gov DATA... · Export‐Import Bank 811 Vermont Avenue, NW Washington, DC 20571 Subject: Independent Auditors’ Report on the Export‐Import

OFFICEOFINSPECTORGENERALEXPORT‐IMPORTBANKoftheUNITEDSTATES

IndependentAuditor’sReportontheExport‐ImportBank’s

DataReliability

September28,2015OIG‐AR‐15‐07

.

IN S P E C T O R GE N E R A L

EXPORT-IMPORT BANK of the UNITED STATES

811 Vermont Avenue , N .W. Wash ing ton , D .C . 20571

September 28, 2015

To: C.J.Hall,ExecutiveVicePresidentandChiefRiskOfficerClaudiaSlacik,SeniorVicePresidentforExportFinanceandChiefBankingOfficerDavidSena,SeniorVicePresidentandChiefFinancialOfficer

From: TerrySettle,AssistantInspectorGeneralforAudits

Subject: IndependentAuditor’sReportontheExport‐ImportBank’sDataReliability

ThismemorandumtransmitsCotton&CompanyLLP’sauditreportonExport‐ImportBank’sDataReliability.Underacontractmonitoredbythisoffice,weengagedtheindependentpublicaccountingfirmofCotton&Companytoperformtheaudit.TheobjectivesoftheauditweretodetermineifthedatarecordedintheEx‐ImBankReportingSystem(ERS)wereadequatelysupportedbysourcedocumentationandwereaccurate,complete,andreliable.Cotton&CompanydeterminedthedatarecordedinERSweregenerallysupportedbysourcedocumentation.Further,therecordedinformationwasgenerallyaccurateandreliableandthefieldswerepopulatedcompletely.Ofthe6,509dataelementsthatweretested,Cotton&Companyidentified44elementsfrom8differentfieldsthatwereinaccuratelyrecorded.Intheirreviewof283authorizations,Cotton&Companyfound36authorizationsthathadatleast1dataelementrecordedinaccuratelyforauthorizationamount,disbursementamount,repaymentamount,smallbusinessamount,woman‐ownedamount,minority‐ownedamount,orprimarysupplier.Cotton&Companyalsoencountereddifficultiestestingdisbursementamountsforworkingcapitalguaranteeauthorizationsandwereunabletodeterminewhethertheassumeddisbursementswererecordedtimely.Finally,Cotton&CompanyfoundthattheOfficeoftheChiefFinancialOfficerwasunabletoprovidesourcedocumentationonatimelybasis,whichmadeitdifficulttoconductanefficientauditandobtainsufficient,appropriateevidencetoprovideabasisforourauditconclusions.Thereportcontainsfourrecommendationsandmanagementconcurredwithallfourrecommendations.Weconsidermanagement’s

proposedactionstoberesponsiveandtherecommendationswillbecloseduponcompletionandverificationoftheproposedactions.WeappreciatethecooperationandcourtesiesprovidedtoCotton&Companyandthisofficeduringtheaudit.Ifyouhavequestions,pleasecontactmeat(202)565‐3498orterry.settle@exim.gov.YoucanobtainadditionalinformationabouttheExport‐ImportBankOfficeofInspectorGeneralandtheInspectorGeneralActof1978atwww.exim.gov/oig.cc: FredHochberg,ChairmanandPresident

AngelaFreyre,GeneralCounselMichaelCushing,SeniorVicePresidentandChiefOperatingOfficer

InciTonguch‐Murray,DeputyChiefFinancialOfficerCristopolisDieguez,BusinessComplianceAnalystStevenKoons,Partner,Cotton&CompanyLLP

September 28, 2015

Terry Settle Assistant Inspector General for Audits Export‐Import Bank 811 Vermont Avenue, NW Washington, DC 20571 Subject: Independent Auditors’ Report on the Export‐Import Bank’s Data Reliability Dear Ms. Settle: Cotton & Company LLP is pleased to submit its performance audit report on the reliability of data recorded in the Export‐Import Bank of the United States (Ex‐Im Bank or the Bank) Reporting System (ERS). Specifically, we determined 1) whether the data recorded in ERS are adequately supported by source documentation and 2) if the data are accurate, complete, and reliable. Cotton & Company conducted an independent performance audit of data pertaining to long‐term (LT) direct loan, loan guarantee, working capital guarantee, and Global Credit Express (GCE) authorizations. Cotton & Company conducted this performance audit in accordance with generally accepted government auditing standards (GAGAS), as established in the Government Accountability Office (GAO)’s Government Auditing Standards, December 2011 Revision. Please feel free to contact me with any questions. Sincerely, COTTON & COMPANY LLP

Steven M. Koons, CPA, PMP Partner

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AUDIT REPORT OIG-AR-15-07

The Export‐Import Bank of the United States (Ex‐Im Bank) is the official export‐credit agency of the United States. Ex‐Im Bank is an independent, self‐sustaining executive agency and a wholly‐owned U.S. government corporation. Ex‐Im Bank’s mission is to support jobs in the United States by facilitating the export of U.S. goods and services. Ex‐Im Bank provides competitive export financing and ensures a level playing field for U.S. exports in the global marketplace.

The Office of Inspector General, an independent office within Ex‐Im Bank, was statutorily created in 2002 and organized in 2007. The mission of the Ex‐Im Bank Office of Inspector General is to conduct and supervise audits, investigations, inspections, and evaluations related to agency programs and operations; provide leadership and coordination as well as recommend policies that will promote economy, efficiency, and effectiveness in such programs and operations; and prevent and detect fraud, waste, abuse, and mismanagement.

ACRONYMS

APS ApplicationProcessingSystemEOL Ex‐ImOnlineERS Ex‐ImBankReportingSystemFMS‐NG FinancialManagementSystem–NextGenerationFY fiscalyearF&A FinancialandAdministrativeSystemGAGAS generallyacceptedgovernmentauditingstandardsGAO GovernmentAccountabilityOfficeGCE GlobalCreditExpressGPRA GovernmentPerformanceandResultsActLT long‐termMT medium‐termOCFO OfficeoftheChiefFinancialOfficerOIG OfficeofInspectorGeneralQ quarter

ii


Why OIG Contracted for This Audit TheExport‐ImportBankoftheUnitedStates(Ex‐ImBankortheBank)storesauthorizationandotherinformationrelatedtoitsproductsintheEx‐ImBankReportingSystem(ERS),adatawarehousestoringinformationfromavarietyofsystemsandusedformanagementanalysisandexternalreporting.TheOfficeofInspectorGeneralcontractedustoconductaperformanceauditofthereliabilityoftheBank’sERSdataforlong‐term(LT)directloan,medium‐term(MT)andLTloanguarantee,workingcapitalguarantee,andGlobalCreditExpress(GCE)products.

What We Recommended WemadefourrecommendationsforEx‐ImBank:(1)reviewtheprocessforrecordingandreviewingauthorization,disbursement,repayment,smallbusiness,woman‐owned,minority‐owned,andprimarysupplierdatafieldsinERStodeterminehowspecificerrorsoccurred;correcttheerrors;andrevisetheprocess;(2)conductacomprehensivereviewusingsourcedocumentationtodeterminewhetherthecurrently‐recordedERSdataareaccurateandsupported,andmakenecessarycorrectionsinthepopulationfordisbursement,repayment;smallbusiness,woman‐ownedandminority‐owneddatafields;(3)communicatetostafftheimportanceofprovidingdatatoauditorsonatimelybasisandtakeactionstomanageconcurrentprioritiesandconsistentlyadheretodeadlinesandauditmilestones;and(4)reviewtheproceduresforstoringandretrievingdatasothatdataarereadilyretrievableforbothmanagementneedsandreviewbyauditors.Managementconcurredwithallfourrecommendations.

What We Found TheobjectivesofthisperformanceauditweretodetermineifthedatarecordedinERSwereadequatelysupportedbysourcedocumentationandwereaccurate,complete,andreliable.WedeterminedthedatarecordedinERSweregenerallysupportedbysourcedocumentation.Further,therecordedinformationwasgenerallyaccurateandreliableandthefieldswerepopulatedcompletely.Specifically,wereviewed23datafieldsforeachtransactioninoursample,equatingto6,509dataelementsbeingtested.Ofthese6,509dataelements,weidentified44elementsfrom8differentfieldsthatwereinaccuratelyrecorded.Wedidnotidentifyerrorsintheother15fieldswetested.Inourreviewof283authorizationsforLTdirectloans,MTandLTguarantees,workingcapitalguarantees,andGCEscombined,wefound36authorizationsthathadatleast1dataelementrecordedinaccurately.Thefigurebelowsummarizestheerrorsweidentified.

Overallsummaryofnumbersoferrorsandprojectederrors

FieldsNumbersofErrors

ProjectedErrorRates

Authorizations 1 0.85%DisbursementAmount* 2 1.38%RepaymentAmount 4 1.02%SmallBusinessAmount 6 0.78%Woman‐OwnedAmount 6 1.60%Minority‐OwnedAmount 11 3.41%PrimarySupplier 12 1.55%DisbursementDate** 2

Note:Projectederrorratesrepresentpointestimates.*Disbursementamountinformationdoesnotreflectresultsforworkingcapitalguarantees.**Errorsrelatedtodisbursementdatewerenotstatisticallyprojected.

Wealsoencountereddifficultiestestingdisbursementamountsforworkingcapitalguaranteeauthorizationsandwereunabletodeterminewhethertheassumeddisbursementswererecordedtimely.Whilewequestioneddisbursementamountsfor22workingcapitalguarantees,wedidnotincludetheminourdisbursementprojections.TheBankshouldaccuratelyandtimelyrecordtransactions.WedeterminedthattheseerrorsrepresentincreasedriskstotheBank’sabilitytouseERSdataforreliablemanagementanalysisandaccuratereporting.Moreover,thequestioneddisbursementamountsfortheworkingcapitalguaranteesraisequestionsastowhethertheBankhassufficientprocessestotimelyandaccuratelycaptureinformationinERSorthesourcesystemsthatfeedintoERS.

WealsofoundthattheOfficeoftheChiefFinancialOfficer(OCFO)wasunabletoprovidesourcedocumentationonatimelybasis,whichmadeitdifficulttoconductanefficientauditandobtainsufficientappropriateauditevidencetoprovideabasisforourauditconclusions.Althoughweultimatelywereabletoobtainsufficientinformationwiththeexceptionofworkingcapitalguaranteedisbursements,thedelaysincreasedauditcostsanddelayedreportingofresults.ThedelaysweencounteredonthisperformanceauditimpededtheOfficeofInspectorGeneral’sabilitytocarryoutitsauthoritiesandprovidethenecessaryoversighttoservethepublicinterest.

Executive Summary September 28, 2015 Independent Audit of Ex-Im Bank’s Data Reliability OIG-AR-15-07

Foradditionalinformation,contacttheOfficeoftheInspectorGeneralat(202)565‐3908orvisitwww.exim.gov/oig.

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INTRODUCTION Objectives ...................................................................................................................... 1

Scope and Methodology .............................................................................................. 1

Background .................................................................................................................... 3

RESULTS Finding 1: ERS Is Generally Accurate, But Contains Various Recording Errors ... 6

Recommendations, Management’s Response, and Evaluation of Management’s Response ...................................................................................................................... 12

Finding 2: Ex-Im Bank’s OCFO Did Not Provide Documentation on a Timely Basis .............................................................................................................................. 12

Recommendation, Management’s Response, and Evaluation of Management’s Response ...................................................................................................................... 14

APPENDICES Appendix A: ERS Fields Tested ................................................................................. 15

Appendix B: Management Comments ..................................................................... 16

TABLE OF CONTENTS

1 AUDIT REPORT OIG-AR-15-07

Objectives ThisreportpresentstheresultsofCotton&CompanyLLP’s(Cotton&Company)performanceauditofthereliabilityoftheExport‐ImportBankoftheUnitedStates(Ex‐ImBankortheBank)’sdatarecordedintheEx‐ImBankReportingSystem(ERS)forlong‐term(LT)directloan,medium‐term(MT)andLTloanguarantee,workingcapitalguarantee,andGlobalCreditExpress(GCE)products.TheobjectivesofthisperformanceauditweretodetermineifthedatarecordedinERSwereadequatelysupportedbysourcedocumentationandwereaccurate,complete,andreliable.

Scope and Methodology Cotton&CompanyplannedandperformedtheaudittodeterminewhetherEx‐ImBank’sERSdataareaccurate,complete,andreliable,andsupportedbysourcedocumentation.Specifically,wedesignedourtestprocedurestomeettheabove‐listedobjectivesforthefourBankproductsweaudited:LTdirectloans,MTandLTguarantees,workingcapitalguarantees,andGCEs.Insuranceproductswerenotincludedinthescopeofourauditduetothehighvolumeandlowdollaramountofthetransactions.WeconductedinterviewsandmadeinquiriesofpersonnelfromtheOfficeoftheChiefFinancialOfficer(OCFO),andtheBusinessCredit,OperationsandDataQuality,Transportation,andStructuredandProjectFinanceDivisionstoobtainanunderstandingofthetypesofsourcedocumentationavailableforthefourproductswetested.Wedocumentedourtestingmethodologybycreatingaplanningmemorandumandauditworkprogram.Inaddition,wepreparedadetailedplanforstratifiedclassicvariablessampling,whichisasamplingmethodologythatusesnormaldistributiontheorytoevaluatethedollaramountofselectedcharacteristicsofapopulationonthebasisofasampleoftheitemsconstitutingthepopulation.Thestratifiedsamplecanalsobeevaluatedforattributes.Thissampleevaluationmethodologyusesthehypergeometricdistributiontoevaluatetherateofoccurrenceofselectedcharacteristicsofapopulationonthebasisofasampleoftheitemsconstitutingthepopulation.Weperformedtheprojectionsandevaluationsofthesampleonlyonastratifiedattributesbasis.Wedidthisbecausethetypesoferrorswefoundseemunrelatedtodollaramountsandmoreindicativeofsystemandprocessweaknesses.WeobtainedapopulationofERSauthorizationsissuedduringthefollowingperiods:

FiscalYear(FY)2014‐relateddatawasasofSeptember30,2014and FY2015quarter(Q)1andQ2(October1,2014throughMarch31,2015)‐related

datawasasofMarch31,2015.TheOCFOtoldustheFY2015datawerefromatestenvironment,butthatitreconciledthedatatoensuretheywerecorrect.Inaddition,weperformedlimitedprocedurestovalidate

INTRODUCTION


thecompletenessofthepopulation.Specifically,fortheFY2014data,weassessedthecompletenessoftheERSdatabyagreeingamountsandquantitiestotheFY2014AuthorizationsSummaryincludedinEx‐ImBank’s2014AnnualReportandreviewingthefinancialstatementauditors’considerationofsuchamountsandquantities.FortheFY2015data,nosuchinformationwasavailableatthetimeofouraudit.Accordingly,wevalidatedthecompletenessoftheERSdatabycomparingittotwosourcesystems:Ex‐ImOnline(EOL)andtheApplicationProcessingSystem(APS)usedforprocessingEx‐ImBank’sproducts.WedeterminedthattheseERSdataweresufficientlyreliableforustosampleeachoftheproductsweaudited.However,wedidnotperformothercompletenessprocedurestodetermineiftherewereunrecordedtransactions.WestratifiedthepopulationofauthorizationsandselectedstratifiedrandomprobabilitysamplesofMTandLTguarantees,workingcapitalguarantees,andGCEs.ForLTdirectloans,therewereonly16itemsinthepopulation.Assuch,wetestedall16items.NoMTdirectloanswereinthepopulation.Figure1showsthesamplesizeandpopulationinformationofthedata:

Figure1:PopulationofdatarecordedinEx‐ImBank’sERSforFY2014andQ1andQ2FY2015

ProductsTotal

PopulationTotalAmountAuthorized

No.ofTransactionsinSample

TotalAmountAuthorizedofTransactionsin

SampleLTDirectLoans 16 $1,937,648,266 16 $1,937,648,266MTandLTLoanGuarantees 148 14,924,335,414 90 14,256,992,282WorkingCapitalGuarantees 529 2,732,666,987 139 1,649,600,980GlobalCreditExpress(GCE) 81 30,215,000 38 14,650,000Totals 774 $19,624,865,667 283 $17,858,891,528

Weperformedtestsofauthorizationdataonthesamplesforeachofthefourproductsweaudited.Weexaminedsourcedocumentationandrelatedevidence,includingapplications,boardauthorizationmemoranda,promissorynotes,amortizationschedules,engineeringreports,loanauthorizationnotices,borrower’srequestsfordisbursement,andotherEx‐ImBankdocumentation.SomeofthisdocumentationispreparedaspartofEx‐ImBank’sinternalcontrolactivities;however,wedidnottest,andthereforewedidnotconcludeon,thedesignoroperatingeffectivenessofinternalcontrols.Foreachitemselected,wetestedwhetherinformationrecordedinERSwassupportedbysourcedocumentationandaccuratelyrecorded.SeeAppendixAforthedetailedlistofERSfieldswetested.

Asnotedabove,weauditedthereliabilityofauthorizationdatarecordedinERS,Ex‐ImBank’sdatawarehouse.Wedidnotconductafinancialstatementaudit,nordidweauditdatadirectlyfromthefinancialmanagementsystem.Accordingly,wedonotexpressanopinionorprovideanyassuranceonEx‐ImBank’sfinancialstatements.

Weconductedourauditon‐siteatEx‐ImBankinWashington,DC,aswellasremotelyattheCotton&CompanyofficeinAlexandria,VA,duringMarch2015throughSeptember2015.


Cotton&Companyconductedthisperformanceauditinaccordancewithgenerallyacceptedgovernmentauditingstandards(GAGAS),asestablishedintheGovernmentAccountabilityOffice(GAO)’sGovernmentAuditingStandards,December2011Revision.Thosestandardsrequirethatweplanandperformtheaudittoobtainsufficient,appropriateevidencetoprovideareasonablebasisforourfindingsandconclusionsbasedonourauditobjectives.Webelievethattheevidenceobtainedprovidesareasonablebasisforourfindingsandconclusionsbasedonourauditobjectives.WediscussedourfindingsandconclusionswithmanagementofficialsonSeptember2,2015;providedmanagementwithadraftofourreportonSeptember8,2015;andincludedtheircommentsandourresponsestothemwhereappropriate.

Background Ex‐ImBankisanindependent,self‐sustainingexecutiveagencyandawholly‐ownedUnitedStatesgovernmentcorporation.Ex‐ImBank’scharter,TheExportImportBankActof1945,asamendedthroughPublicLaw112‐122,May30,2012,states:

It is the policy of the United States to foster expansion of exports ofmanufactured goods, agricultural products, and other goods andservices, thereby contributing to the promotion and maintenance ofhigh levels of employment and real income, a commitment toreinvestment and job creation, and the increased development of theproductiveresourcesoftheUnitedStates.

Tofulfillitscharter,Ex‐ImBankassumesthecreditandcountryrisksthattheprivatesectorisunableorunwillingtoaccept.TheBankprovidesworkingcapitalguarantees,exportcreditinsurance,loanguarantees,anddirectloanstocountertheexportfinancingprovidedbyforeigngovernmentsonbehalfofforeigncompaniesandhelpU.S.exportersremaincompetitive.Forworkingcapitalguarantees,Ex‑ImBankprovidesrepaymentguaranteestolendersonsecured,short‐termworkingcapitalloansmadetoqualifiedexporters.Theworkingcapitalguaranteemaybeapprovedforasingleloanorarevolvinglineofcredit.Ex‑ImBank’sworkingcapitalguaranteeprotectsthelenderfromdefaultbytheexporterfor90percentoftheloanprincipalandinterest.ExportcreditinsuranceallowsU.S.exporterstoselltheirgoodsoverseasbyprotectingthemagainsttheriskofforeign‐buyerorotherforeign‐debtordefaultforpoliticalorcommercialreasons,allowingthemtoextendcredittotheirinternationalcustomers.LoanguaranteesonaMTorLTbasiscovertherepaymentrisksontheforeignbuyer’sdebtobligationsincurredtopurchaseU.S.exports.Generally,boththeMTandLTguaranteeprogramscoverupto85percentoftheU.S.contractvalueofshippedgoods.Intheeventofapaymentdefaultbytheborrower,Ex‐ImBankwillpaytothelendertheoutstandingprincipalandinterestontheloan.


Ex‑ImBankoffersMTandLTfixed‐rateloansdirectlytoforeignbuyersofU.S.goodsandservices.Ex‑ImBankextendstoacompany’sforeigncustomerafixed‐rateloancoveringupto85percentoftheU.S.contractvalue.ThebuyermustmakeacashpaymenttotheU.S.exporterofatleast15percentoftheU.S.contractvalue.Inaddition,Ex‐ImBankoffersGCEloans,inwhichcreditworthysmallbusinessexportersmaybeeligiblefor6‐or12‐monthrevolvinglinesofcreditofupto$500,000.TheinformationforauthorizationsrelatedtothesevariousproductsisstoredinERS,adatawarehouse.TheinformationinERSoriginatesinavarietyofothersystems,including:

EOL,aweb‐basedinfrastructurethatallowsusers(i.e.,exporters,importers)tosubmitinformationelectronicallyandcheckonexport/importrecords.EOLisusedtocaptureinitialapplicationdataandtrackdocuments.

APS,asystemusedtoprocessproductsfromtheinitialcustomercontacttoapplicationreceipt,underwritingevaluation,andwhenapplicable,underwritingapproval.

FinancialandAdministrativeSystem(F&A),anin‐house,customdevelopedfinancialsystemofEx‐ImBank.TheBankusedF&AforFY2014activities.

FinancialManagementSystem–NextGeneration(FMS‐NG),acommercial‐off‐the‐shelfsystemcomprisedofOracleFederalFinancialsandOracleLoans.Ex‐ImBankinitiateditsFMS‐NGimplementationprojectinFY2012andlaunchedtheuseofFMS‐NGonOctober1,2014,forFY2015activities.Ex‐ImBankcontinuestoworkonreconcilingandintegratingFMS‐NGwithBankoperations.


Duringouraudit,wedeterminedthatthedatarecordedinERSweregenerallysupportedbysourcedocumentation.Further,therecordedinformationwasgenerallyaccurateandreliableandthefieldswerepopulatedcompletely.However,weidentifiedinstanceswheretheBankrecordedinaccurateinformationwithrespecttothefieldsthatwetested.Specifically,theBankdidnotaccuratelyrecordinERScertain(1)authorization,disbursement,andrepaymentamounts;(2)smallbusiness,woman‐owned,andminority‐ownedparticipationamounts;and(3)primarysuppliers.Figure2presentsanoverallsummaryofthenumbersoferrorsandprojectederrorratesforeachofthesecategories:

Figure2:Overallsummaryofnumbersoferrorsandprojectederrors

FieldsNumbersofErrors

ProjectedErrorRates

Authorizations 1 0.85%DisbursementAmount* 2 1.38%RepaymentAmount 4 1.02%SmallBusinessAmount 6 0.78%Woman‐OwnedAmount 6 1.60%Minority‐OwnedAmount 11 3.41%PrimarySupplier 12 1.55%DisbursementDate** 2Note:Projectederrorratesrepresentpointestimates.*Disbursementamountinformationdoesnotreflectresultsforworkingcapitalguarantees.**Errorsrelatedtodisbursementdatewerenotstatisticallyprojected.

Furthermore,weencountereddifficultiestestingdisbursementamountsfortheworkingcapitalguaranteeauthorizations.BasedontheERSdatawereceived,wewereunabletodeterminewhetherassumeddisbursementswererecordedtimely.Accordingly,wedidnotincludeworkingcapitalguaranteesinourdisbursementprojections.WedeterminedthattheseerrorsrepresentedincreasedriskstotheBank’sabilitytouseERSdataforreliablemanagementanalysisandaccuratereporting,includingexternalpublications,suchasEx‐ImBank’sGovernmentPerformanceandResultsAct(GPRA)ReportsandAnnualReports.Moreover,thedifficultiesweencounteredintestingtheworkingcapitalguaranteedisbursementsraisequestionsastowhethertheBankhassufficientprocessestotimelyandaccuratelycaptureinformationinERSorthesourcesystemsthatfeedintoERS.

Inaddition,wefoundthattheOCFOwasunabletoprovidesourcedocumentationonatimelybasis,whichmadeitdifficulttoconductanefficientauditandobtainsufficientappropriateauditevidencetoprovideabasisforourauditconclusions.Althoughweultimatelywereabletoobtainsufficientinformationwiththeexceptionofworkingcapitalguaranteedisbursements,thedelaysincreasedauditcostsanddelayedreportingofresults.ThedelaysweencounteredonthisperformanceauditimpededtheOfficeofInspector

RESULTS


General’s(OIG)abilitytocarryoutitsauthoritiesandprovidethenecessaryoversighttoservethepublicinterest.Wemadefourrecommendationstoaddresstheaboveissues.Theserecommendations,ifimplemented,shouldhelpimprovereliabilityofdatainERS.Ex‐ImBankmanagementagreedwithourrecommendationsandstatedthatithasalreadytakenactioninresponsetoourrecommendations.Ex‐ImBankmanagement’sresponsestothefindingsidentifiedinourperformanceauditareincludedwithinthereportandinAppendixB.WedidnotauditEx‐ImBankmanagement’sresponses,andaccordingly,weexpressnoopiniononthem.

Finding 1: ERS Is Generally Accurate, But Contains Various Recording Errors

WedeterminedthatthedatarecordedinERSweregenerallysupportedbysourcedocumentation.Further,therecordedinformationwasgenerallyaccurateandreliableandthefieldswerepopulatedcompletely.Specifically,wereviewed23datafieldsforeachtransactioninoursample,equatingto6,509dataelementsbeingtested.Ofthese6,509dataelements,weidentified44elementsfrom8differentfieldsthatwereinaccuratelyrecorded.Wedidnotidentifyerrorsintheother15fieldswetested.Inourreviewof283authorizationsforLTdirectloans,MTandLTguarantees,workingcapitalguarantees,andGCEscombined,wefound36authorizationsthathadatleast1dataelementrecordedinaccurately.Specifically,theBankdidnotaccuratelyrecordinERScertain(1)authorization,disbursement,andrepaymentamounts;(2)smallbusiness,woman‐owned,andminority‐ownedparticipationamounts;and(3)primarysuppliers.Numbersoferrorsandprojectederrorratesaresummarizedaboveinfigure2anddetailedinthesectionsbelow.Inaddition,wequestioneddisbursementamountsfor22workingcapitalguarantees.InaccordancewithGAO’sStandardsforInternalControlintheFederalGovernment(1999),theBankshouldaccuratelyandtimelyrecordtransactions.TheBankshouldhavesufficientcontrolactivitiestoensurethatalltransactionsarecompletelyandaccuratelyrecorded.WedeterminedthattheseerrorsrepresentincreasedriskstotheBank’sabilitytouseERSdataforreliablemanagementanalysisandaccuratereporting.Moreover,thequestioneddisbursementamountsfortheworkingcapitalguaranteesraisequestionsastowhethertheBankhassufficientprocessestotimelyandaccuratelycaptureinformationinERSorthesourcesystemsthatfeedintoERS.

Ex-Im Bank Incorrectly Recorded Certain Authorization, Disbursement, and Repayment Amounts in ERS

WefoundthatEx‐ImBank’sERSdatacontainederrorsrelatedtotheauthorization,disbursement,andrepaymentamountsforsomeoftheauthorizationswetested.AuthorizationForoneworkingcapitalguaranteeauthorizedinFY2015,theauthorizedamountrecordedinERSdidnotagreewithsupportingdocumentation;theamountrecordedinERSwasoverstatedby$900.Basedonourstatisticalprojectionsoftheseresults,weprojected


sevenerrorswithauthorizedamountsforworkingcapitalguarantees(1.24percent).Weare95percentconfidentthattherearenomorethan32possibleerrors(6.04percent)intheworkingcapitalguaranteepopulation.Theoverallprojectederrorrateforauthorizationsforallthepopulationswas0.85percentwithanuppererrorlimitof4.23percentatthe95percentconfidenceinterval.DisbursementsForLTandMTguarantees,wenotedtwoinstancesinwhichthedisbursementamountsrecordedinERSwereunderstatedanddidnotagreewithsourcedocumentation,suchaspromissorynotesanddisbursementrequestsfromexternallenders.Theprojectionofthiserrorratewas2.28percentandtheuppererrorlimitwas6.08percent.Theoverallprojectederrorratefortheentirepopulationwas1.38percentwithanuppererrorlimitof4.20percentatthe95percentconfidencelevel.Thetwoinstancesresultedin$194millionthatwasnotrecordedinERSasofMarch31,2015;oursamplehadmorethan$6billionofrecordeddisbursements,excludingworkingcapitalguaranteeswhichwewilldiscussseparatelybelow.ThetwoinstancesinvolvedoneFY2015LTguaranteeandoneFY2015MTguaranteeforwhichweobservedpromissorynoteanddisbursementrequestsupport,respectively,thatevidencedthereshouldhavebeendisbursementsrecordedasofMarch31,2015.AlongwiththeFY2015launchofFMS‐NGonOctober1,2014,theOCFOtoldusitconductedapost‐implementationexercisetoreconcileFMS‐NGdatapriortothisdatabeingreleasedinERS.TheOCFOalsotoldusthataspartofthisreconciliation,thetwoinstancesmentionedabovehadbeenidentifiedandweresubsequentlycorrected.SummaryresultsofourtestingandourrelatedstatisticalprojectionsarepresentedinFigure3,below.

Figure3:Disbursementamounts,errors,projectederrorrates,andupperlimitsoferrorrates

Products DisbursementResults

TotalDisbursementsinSample

AbsoluteAmountofErrors

ProjectedErrorRates

UpperLimitsofErrorRates

LTDirectLoans* $58,351,362 $0 0.00% 0.00%MTandLTLoanGuarantees 6,293,118,566 194,408,211 2.28% 6.08%GlobalCreditExpress(GCE) 4,407,503 0 0.00% 4.94%

OverallSummary $6,355,877,431 $194,408,211 1.38% 4.20%

*Giventherewereonly16LTdirectloansinthepopulation,wetestedallitems.Therefore,wedidnotneedtomakestatisticalprojections.Note:Projectederrorratesrepresentpointestimates;upperlimitsoferrorratesrepresentthemaximumpossibleerrorrateatthe95percentconfidencelevel.Theoverallsummaryprojectederrorratesandupperlimitsoferrorratesarebasedonoverallstatisticalprojectionsandarenotthesumofdetailedamountsforeachproduct.

Weencountereddifficultiestestingdisbursementamountsfortheworkingcapitalguaranteeauthorizationsandaccordingly,didnotincludeworkingcapitalguaranteesinourdisbursementprojections.Inthecaseofworkingcapitalguarantees,Ex‐ImBankdoesnottrackactualcashflows,butratherrecordsassumeddisbursementswhencertainconditionsaremet,includingreceiptoffees,requireddocumentationfromdelegatedauthoritylenders,andEx‐ImBankauthorization.


TheERSdatafromwhichweselectedourstatisticalsamplecontainedaggregateddisbursementandrepaymentinformationasofSeptember30,2014,forFY2014authorizationsandasofMarch31,2015,forQ1andQ2FY2015authorizations.OCFOprovidedERSdatabyindividualtransactiondatetofacilitateourtestingofthedisbursementsandrepaymentsforitemsweselected.ThedisaggregatedERSdataprovidedbyOCFOdidnotagreetotheoriginaldatawereceived.Afterseveralinquiries,weultimatelylearnedthesedifferencesexistedbecausethedisaggregatedERSdatawerebasedupontheeffectivedatesofthetransactions,notbaseduponthegeneralledgerpostingdates.ItisOCFO’spracticetorecordtheeffectivedateofadisbursementasthedisbursementdateinERS,evenifthatdateismonthspriortothegeneralledgerpostingdateoftheassumeddisbursement.Assuch,basedontheERSdatawereceived,wewereunabletodeterminewhetherassumeddisbursementswererecordedtimely.Thedisaggregateddatacontaineddisbursementdatesthatwerebackdatedtotheactualeffectivedateoftheassumeddisbursement,ratherthanthedatethedisbursementwaspostedinthegeneralledger.Accordingly,wedidnotprojectresultsforworkingcapitalguarantees.ForworkingcapitalguaranteesauthorizedinFY2014,wewereabletotesttheamounts,butwereunabletotestthetimelinessofrecording.ForQ1andQ2FY2015workingcapitalguarantees,wequestioned22ofthe25workingcapitalguaranteeauthorizationsinoursampleforwhichERShadarecordeddisbursementamountof$0.00asofMarch31,2015.Further,wenotedthatonly4ofthetotalpopulationof98workingcapitalguaranteesauthorizedinQ1andQ2ofFY2015hadrecordeddisbursements.GiventhattheFY2015authorizationsoccurredasearlyasOctober1,2014,andwesawevidenceofthereceiptoffees,wewouldhaveexpectedmoredisbursementstoberecordedasofMarch31,2015.Duringtheaudit,theBankdidnotprovideevidenceforustodeterminewhetherornotallconditionsweremettohaveassumedthedisbursementsonallofthesampledworkingcapitalguaranteesasofMarch31.However,wewereabletoconfirmthatatleastsomeofthetransactionsshouldhavehadassumeddisbursementsrecorded.OCFOattributestherecordingdelaystoitsoperationalprocesses,citingthatitcantakeasignificantamountoftimetoconfirmthatallconditionsaremettorecordanassumeddisbursement.OCFOalsociteddelaysinrecordingtheassumeddisbursementsasaresultoftheprioritizationofFMS‐NGimplementationactivities,whichincludedapost‐implementationexercisetoreconcileFMS‐NGdatapriortothedatabeingreleasedinERS.OCFOtoldusthefirstBank‐widereleaseofFY2015Q1financialdataoccurredinJune2015,andthatitmustvalidatebeforereleasingthemtoexternalparties.OCFO’sprocessmeansthattheworkingcapitalguaranteeassumeddisbursementamountsinERSmaybeincompleteatanygiventime,suchthatEx‐ImBankisunabletoreliablydeterminetheamountsoutstandingforthoseauthorizations.Itisimportantthatthisinformationisaccurateasitisusedtocalculatelossreserves.Further,thedelaysraisequestionabouttheefficiencyandeffectivenessofOCFO’sprocessforrecordingassumeddisbursements.


Finally,wenotedtwoinstancesinwhichtheeffectivedateforthedisbursementrecordedinERSdifferedfromthesourcedocumentation.EventhoughthetwoERSdisbursementdateswereincorrect,theamountswererecordedcorrectly.Wedidnotprojecttheseerrors.RepaymentsWenotedfourinstancesinwhichtheERSrepaymentamountdidnotagreewithsourcedocumentation,suchaspromissorynoteamortizationschedules,decisionmemoranda,andwiretransferevidence.Specifically,wenotedtwoLTguarantees,oneMTguarantee,andoneGCEforwhichtherecordedrepaymentamountswereincorrect.TherepaymentamountsforthetwoLTguaranteesandoneMTguaranteedidnotagreewiththeassumedrepaymentsinthesourcedocumentation.TheonerepaymenterrorforaGCEinvolvedanFY2014repaymentof$1,941thatwasrecordedearlyinFY2015.OCFOstateditdidnotbelievethisrepresentedanerrorasitoccurredasaresultoftheirprocessforrecordingtransactionsandthecashwasaccountedforonthefinancialstatements.However,sincetherepaymenteventoccurredinFY2014,itshouldbeaccountedforintheBank’sFY2014reportingsystemdata.SummaryresultsofourtestingandourrelatedstatisticalprojectionsarepresentedinFigure4,below.

Figure4:Repaymentamounts,repaymenterrors,projectederrorrates,andupperlimitsoferrorrates

Products RepaymentResults

TotalRepaymentsin

Sample

AbsoluteAmountofErrors

ProjectedErrorRates


LTDirectLoans* $0 $0 0.00% 0.00%MTandLTLoanGuarantees 131,223,901 1,718,711 3.89% 8.78%WorkingCapitalGuarantees 151,849,930 0 0.00% 4.29%GlobalCreditExpress(GCE) 100,000 1,941 2.63% 8.64%

OverallSummary $283,173,831 $1,720,652 1.02% 4.16%

*Giventherewereonly16LTdirectloansinthepopulation,wetestedallitems.Therefore,wedidnotneedtomakestatisticalprojections.Note:Projectederrorratesrepresentpointestimates;upperlimitsoferrorratesrepresentthemaximumpossibleerrorrateatthe95percentconfidencelevel.Theoverallsummaryprojectederrorratesandupperlimitsoferrorratesarebasedonoverallstatisticalprojectionsandarenotthesumofdetailedamountsforeachproduct.

Inaccurateauthorization,disbursement,andrepaymentamountsimpairtheBank’sabilitytomonitoramountsoutstandingandreportthestatusofsuchinformationinexternalpublicationssuchastheGPRAandAnnualReports.Ex-Im Bank Inaccurately Recorded Certain Small Business, Woman-Owned, and Minority-Owned Participation Amounts in ERS

Ex‐ImBankdidnotproperlyrecordsomesmallbusiness,woman‐owned,andminority‐ownedparticipationamountsinERS.Specifically,wefound23errorsinthesampledauthorizationswetested.Theseerrorsincludedunderstatementsandoverstatements.


WenotedsixinstancesinwhichthesmallbusinessamountrecordedinERSdifferedfromthesourcedocumentation,theengineeringmemorandum,foreachcorrespondingauthorization.SummaryresultsofourtestingandourrelatedstatisticalprojectionsarepresentedinFigure5,below.

Figure5:Smallbusinesserrors,projectederrorrates,andupperlimitsoferrorrates

Product SmallBusiness Absolute

AmountofErrors

NumbersofErrorsinSample

ProjectedErrorRates


LTDirectLoans* $1,918,816 4of16 25.00% 25.00%MTandLTLoanGuarantees 10,650,768 2of90 1.35% 4.73%WorkingCapitalGuarantees 0 0of139 0.00% 4.29%GlobalCreditExpress(GCE) 0 0of38 0.00% 4.94%OverallSummary $12,569,584 6of283 0.78% 3.82%*Giventherewereonly16LTdirectloansinthepopulation,wetestedallitems.Therefore,wedidnotneedtomakestatisticalprojections.Note:Projectederrorratesrepresentpointestimates;upperlimitsoferrorratesrepresentthemaximumpossibleerrorrateatthe95percentconfidencelevel.Theoverallsummaryprojectederrorratesandupperlimitsoferrorratesarebasedonoverallstatisticalprojectionsandarenotthesumofdetailedamountsforeachproduct.

Wenotedsixinstancesinwhichthewoman‐ownedamountrecordedinERSdifferedfromtheamountlistedintheapplication.SummaryresultsofourtestingandourrelatedstatisticalprojectionsarepresentedinFigure6,below.

Figure6:Woman‐ownederrors,projectederrorrates,andupperlimitsoferrorrates

Product Woman‐Owned Absolute

AmountofErrors


ProjectedErrorRates


LTDirectLoans* $0 0of16 0.00% 0.00%MTandLTLoanGuarantees 0 0of90 0.00% 3.38%WorkingCapitalGuarantees 51,300,000 3of139 1.14% 5.55%GlobalCreditExpress(GCE) 1,425,000 3of38 7.89% 16.05%OverallSummary $52,725,000 6of283 1.60% 4.80%*Giventherewereonly16LTdirectloansinthepopulation,wetestedallitems.Therefore,wedidnotneedtomakestatisticalprojections.Note:Projectederrorratesrepresentpointestimates;upperlimitsoferrorratesrepresentthemaximumpossibleerrorrateatthe95percentconfidencelevel.Theoverallsummaryprojectederrorratesandupperlimitsoferrorratesarebasedonoverallstatisticalprojectionsandarenotthesumofdetailedamountsforeachproduct.

Wenoted11instancesinwhichtheminority‐ownedamountrecordedinERSdifferedfromtheamountlistedintheapplication.SummaryresultsofourtestingandourrelatedstatisticalprojectionsarepresentedinFigure7,below.


Figure7:Minority‐ownederrors,projectederrorrates,andupperlimitsoferrorrates

Product Minority‐Owned Absolute

AmountofErrors


ProjectedErrorRates

UpperLimitsofErrorRate

LTDirectLoans* $0 0of16 0.00% 0.00%MTandLTLoanGuarantees 4,992,000 1of90 0.68% 4.05%WorkingCapitalGuarantees 38,700,000 4of139 2.38% 9.67%GlobalCreditExpress(GCE) 2,670,000 6of38 15.79% 24.69%OverallSummary $46,362,000 11of283 3.41% 6.95%*Giventherewereonly16LTdirectloansinthepopulation,wetestedallitems.Therefore,wedidnotneedtomakestatisticalprojections.Note:Projectederrorratesrepresentpointestimates;upperlimitsoferrorratesrepresentthemaximumpossibleerrorrateatthe95percentconfidencelevel.Theoverallsummaryprojectederrorratesandupperlimitsoferrorratesarebasedonoverallstatisticalprojectionsandarenotthesumofdetailedamountsforeachproduct.

Inaddition,weidentifiedoneFY2014GCEauthorizationthatwasrecordedinERSasminority‐owned,butwasnotsupportedbyEx‐ImBank’sdocumentation.However,Ex‐ImBankmanagementprovidedthird‐partyevidencethatthisauthorizationwasrecordedcorrectlyasminority‐ownedinresponsetoourquestions.Thisthird‐partyinformationwasnotcontainedinEx‐ImBank’ssupportingdocumentation.Inaccuratesmallbusiness,woman‐owned,andminority‐ownedparticipationamountsincreasetheriskofunreliablereportingusedformakingdecisions.Forexample,theBankmaynotbeabletoaccuratelyrespondtocongressional,FreedomofInformationAct,andOIGrequests.Furthermore,internalandexternalreports,suchastheGPRAandAnnualReports,maynotbeaccurate.Ex-Im Bank Inaccurately Recorded Certain Primary Suppliers in ERS

WenotedinconsistentuseoftheprimarysupplierfieldinERSforMTandLTguarantees.Althoughanauthorizationcaninvolvemanysuppliers,theprimarysupplierfieldcapturesthemostsignificantsupplier.Inourstatisticalsample,weidentified12authorizationsforwhichtheprimarysupplierinERSwasincorrect.These12authorizationsrelatedtotheTransportationDivisionandinvolvedthesaleofaircrafttovariousentities.Theaircraftmanufacturerwaslistedasoneofthemultiplesuppliersontheboardmemorandumparticipantattachment;however,“VariousUSsmallbusinesses”wasrecordedastheprimarysupplierinERS.BasedontheproductdescriptionanddiscussionswithEx‐ImBankpersonnel,wedeterminedthattheaircraftmanufacturershouldhavebeenlistedastheprimarysupplierinERS.Basedonourstatisticalprojectionsoftheseresults,weare95percentconfidentthattherearenomorethananadditionalfiveerrors(foratotalof17possibleerrors)inthepopulation.WedidnotidentifysimilarerrorsforLTdirectloans,workingcapitalguarantees,orGCEs.ImproperrecordingofprimarysupplierinformationreducesthereliabilityofERSdataformanagement’sanalysisandreporting.


Recommendations, Management’s Response, and Evaluation of Management’s Response

Recommendations:

WerecommendthattheChiefFinancialOfficer,ChiefBankingOfficer,andChiefRiskOfficer:

1. ReviewEx‐ImBank’sprocessforrecordingandreviewingthefollowingdatafieldsinERStodeterminehowthesespecificerrorsoccurred;correcttheerrors;andrevisetheprocessasappropriate:

a. Authorization,disbursements,andrepayments;b. Smallbusiness,woman‐owned,andminority‐ownedamounts;andc. Primarysupplier.

2. Conductacomprehensivereviewusingsourcedocumentationtodetermine

whetherthecurrently‐recordedERSdataareaccurateandsupported,andmakenecessarycorrectionsinthepopulationforthefollowingdatafields:

a. Disbursementsandrepayments;andb. Smallbusiness,woman‐owned,andminority‐ownedamounts.

Management’sResponse:

Ex‐ImBankManagementconcurredwithbothrecommendationsandstateditwillcorrectthe44identifiederrors,reviewthecauseoftheerrors,andrevisetheprocessesorprocedures,asappropriate.Inaddition,managementstateditwouldconductacomprehensivereviewtodeterminewhetherthecurrently‐recordedERSdataareaccurateandsupported.Managementalsoplanstoestablishaworkinggrouptoaddressthisrecommendation.

OurEvaluationofManagement’sResponse:

Ex‐ImBankManagement’sproposedactionsareresponsivetotherecommendations.Therefore,therecommendationsareconsideredresolvedandwillbecloseduponcompletionandverificationoftheproposedactions.

Finding 2: Ex-Im Bank’s OCFO Did Not Provide Documentation on a Timely Basis

TheBank’sOCFOdidnotprovideERSdataandrelatedsourcedocumentationonatimelybasis.Withoutmanagement’scooperation,itisdifficulttoconductanefficientauditandobtainsufficientappropriateauditevidencetoprovideabasisforfindingsandconclusions.Forexample,onMarch26,2015,priortothestartofouraudit,weinformedtheOCFOmanagementthatwewouldneedtoobtainERSdataforFY2014andQ1andQ2ofFY2015.TheOCFOpromptlyprovidedtheFY2014dataonApril7.Duringtheentranceconference


heldonApril17,theOCFOexplainedthattheFY2015datawouldbeavailableinERSwithinafewdays.WefolloweduponApril22andafteradditionalfollow‐upemails,wefinallyreceivedtheERSdataforQ1andQ2ofFY2015onMay7,approximatelyfiveweeksaftertheinitialrequestandmorethantwoweeksaftertheOCFOstatedtheinformationwouldbeavailableinERS.Inaddition,ittookmorethansixweekstoobtaintheinformationneededtovalidatethecompletenessoftheFY2015Q1andQ2populationandittookmorethannineweekstoreceivecertaindisbursementandrepaymentinformation.Althoughweultimatelywereabletoobtainsufficientinformationwiththeexceptionofworkingcapitalguaranteedisbursements,thedelaysincreasedauditcostsanddelayedreportingofresults.ThedelaysweencounteredonthisperformanceauditimpededOIG’sabilitytocarryoutitsauthoritiesandprovidethenecessaryoversighttoservethepublicinterest.TheOCFOcommunicateditscompetingpriorities,includingcontinuedFMS‐NGimplementationactivities,whichwereOCFO’sprioritiesbasedoninstructionsitsaiditreceivedfromtheBank’sChairmanandChiefRiskOfficer.TheOCFOindicatedthatitdidnotrealizetheextenttowhichFMS‐NGactivitieswouldimpactitsabilitytorespondtoauditrequests.TheOCFOalsonotedthatpreparationforcongressionalhearingswasasecondaryreasonforthedelays.Weconsideredtheseotherprioritiesbyinitiallyrequestingonlyinformationthatshouldbereadilyavailableandadjustingduedates.Nevertheless,theOCFOwasunabletohandletheconcurrentpriorities,andwestillencountereddelaysandmissedauditdeadlines.However,wefoundthattheBusinessCredit,OperationsandDataQuality,andTransportationDivisionswereresponsivetoourrequestsforinformationthroughouttheaudit.Theseofficesprovidedsupportforthetestedtransactions,walkedusthroughthesupportingdocumentationforexampletransactions,andwereavailabletoanswerquestionsthataroseduringourreviewsofsourcedocumentation.GAO’sStandardsforInternalControlintheFederalGovernment(1999)statesthatalldocumentationandrecordsshouldbeproperlymanagedandmaintained.Thismeansthatdocumentationandrecordsshouldbereadilyavailableandlocatable.Moreover,anOctober23,2014,letterfromChairmanandPresidentFredP.HochbergremindsEx‐ImBankemployeesandcontractorstoberesponsivetoauditrequests.Inaddition,theBankissuedarelatedpolicy,GC‐2014‐002,PolicyonCooperationwiththeOfficeofInspectorGeneral,whichstatesthat“AllemployeesareexpectedtocooperatewithofficialsandemployeesoftheOIGbyfullyprovidinginformationandbyprovidingassistanceandsupportasisneededfortheOIGtoproperlycarryouttheprovisionsoftheIGAct.”1

1 The Inspector General Act of 1978 (P.L. 95‐452), as amended in 2002 (P.L. 107‐189) established an independent Office of Inspector General within EXIM.


Recommendation, Management’s Response, and Evaluation of Management’s Response

Recommendation:

WerecommendthattheChiefFinancialOfficerandChiefRiskOfficer:

3. Communicatetostafftheimportanceofprovidingdatatoauditorsonatimelybasisandtakeactionstomanageconcurrentprioritiesandconsistentlyadheretodeadlinesandauditmilestonestohelpensuresuccessfulcompletionofauditsandtimelyissuanceofauditreports.

4. Reviewtheproceduresforstoringandretrievingdatasothatdataarereadilyretrievableforbothmanagementneedsandforreviewbyauditors.

Management’sResponse:

Ex‐ImBankmanagementconcurredwithbothrecommendations.ManagementstatedthattheCFOwillcommunicatetostafftheimportanceofmeetingauditdeadlinesandrequirestafftoprovidewrittennotificationtotheCFOincaseswherethereareissuesmeetingauditdeadlines.Inturn,notificationwillthenbeprovidedtotheOIG.Inaddition,Ex‐ImBankmanagementstatedthattheCFOwillrecirculatetheOctober23,2014,letterfromtheChairmanoftheBankandthePolicyonCooperationwiththeOIG.Finally,managementstateditwouldreviewproceduresforstoringandretrievingdatasothatdataarereadilyretrievable.ManagementnotedthatitgenerateddataforourauditfromatestenvironmentduringFMS‐NGimplementation,butthatithasresolvedimplementationissuesandthatstoringandretrievingdataisnolongeranissue.

OurEvaluationofManagement’sResponse:

Ex‐ImBankmanagement’sproposedactionsareresponsivetotherecommendations.Therefore,therecommendationsareconsideredresolvedandwillbecloseduponcompletionandverificationoftheproposedactions.


Appendix A: ERS Fields Tested Aspartofouraudit,wetestedinformationrecordedinERSforthefollowinglistoffields:

AuthorizationFiscalYear

AuthorizationDate

DealSubmittedDate

DealProgramDescription

CurrentBudgetCostLevel(riskrating)

InitialBudgetCostLevel(riskrating)

TermCode

PrimaryApplicantName

PrimaryBorrowerName

PrimarySupplierName

PrimaryExporterName

PrimaryBuyerName

PrimaryExportProductDescription

LifetoDateClaimTotalPaidAmount

LifetoDateAuthorizationAmount

LifetoDateSmallBusinessAuthorizationAmount

LifetoDateMinority‐OwnedAuthorizationAmount

LifetoDateWoman‐OwnedAuthorizationAmount

LifetoDateDisbursements/Shipments

DisbursementDate

LifetoDateOutstandingExposureAmount

LifeToDateRepaid

RepaymentDate

APPENDIX A


Appendix B: Management Comments

APPENDIX B



The Chief financial Officer ("CFO'") will talce the following acnons co communicate to staff the unportance of providing timely information to the duditor,,. First, the CFO wilJ circulate an email to stnffinforming them of the imponance of mocting audit deadlines. As staff'>trivcs to meet those deadlines of the OIG issues may arise. If this is the case, staff must document issues in wnnng aod notify the CFO. Written notificati<>n will be submitted to the OIG. Second, the CFO will recirculate the October 23, 2014 letter from the Chairman of the Bank and the Policy on Cooperation with the OIG, reminding staff to respond and cooperate fully with 010 officials.

Rccommcndotion 4: ReYtCY. the procedures for storing and retrie' ing data so that data are readily retrievable for both ntarul£ement needs and for review by auditors

Managemen1 Rcsoonse: The Bank concurs with this rccom.mendALion.

The Bank will n:view the procedures for storing a11d retrieving dl11a so tha.l data are readily retrievable for both management needs and for revie"' by auditon. It is important to note that the auditors requested data for this audit that wus in a test environment, ~•th the implementauon of the new financial management system still being ruconc:iled, tested and validated. With post implemenution issues Y.Orl<cd out, storing and retneving data is DO longer an issue. On June 15, 2015, the Bank released FY 2015 daUI.

We thank the OIG for your efforts to ensure the: Bank's policies and procedures continue to unprove, as well as die work you do with us to protect Ex-Im funds from fraud, waste. and abuse. We look forward to strengthening our "-Orking rcl:itionship and continuing to work closely with the Office of the Inspector Genernl.

Sincerely.

Charles J Hall Executive V1oe President ond Chief Risk Officer Export-Import Bank of the United Statl!S

3


To Report Fraud, Waste, or Abuse, Please Contact:

Email: [email protected]

Telephone: 1‐888‐OIG‐Ex‐Im(1‐888‐644‐3946)

Fax: (202)565‐3988

Address: OfficeofInspectorGeneral Export‐ImportBankoftheUnitedStates 811VermontAvenue,NW Suite138 Washington,DC20571

Comments and Suggestions IfyouwishtocommentonthequalityorusefulnessofthisreportorsuggestideasforfutureauditspleasecontactTerrySettle,ActingAssistantInspectorGeneralforAudits,[email protected](202)565‐3498.Comments,suggestions,andrequestscanalsobemailedtotheattentionoftheAssistantInspectorGeneralforAuditsattheaddresslistedabove.

Foradditionalinformation,contacttheOfficeoftheInspectorGeneralat(202)565‐3908orvisitwww.exim.gov/oig.

Office of Inspector General Export-Import Bank of the United States 811 Vermont Avenue, NW Washington, DC 20571 202-565-3908 www.exim.gov/oig

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EXPORT IMPORT BANK the UNITED STATES - exim.gov DATA... · Export‐Import Bank 811 Vermont Avenue, NW Washington, DC 20571 Subject: Independent Auditors’ Report on the Export‐Import