Summary: In connection with fulfilling our requirement to audit the financial statements of the U.S. government, we audited and reported on the Schedules of Federal Debt Managed by the Bureau of the Public Debt (BPD) for the fiscal years ended September 30, 2009 and 2008. As part of these audits, we performed a review of the general and application information security controls over key BPD financial systems. As we reported in connection with our audit of the Schedules of Federal Debt for the fiscal years ended September 30, 2009 and 2008, we concluded that BPD maintained, in all material respects, effective internal control over financial reporting relevant to the Schedule of Federal Debt as of September 30, 2009, that provided reasonable assurance that misstatements, losses, or noncompliance material in relation to the Schedule of Federal Debt would be prevented or detected and corrected on a timely basis. However, we identified information security deficiencies affecting internal control over financial reporting, which, while we do not consider them to be collectively either a material weakness or significant deficiency, nevertheless warrant BPD management's attention and action. This report presents the control deficiencies we identified during our fiscal year 2009 testing of the general and application information security controls that support key BPD automated financial systems relevant to BPD's Schedule of Federal Debt. This report also includes the results of our follow-up on the status of BPD's corrective actions to address information security control-related recommendations contained in our prior years' audit reports and open as of September 30, 2008. In a separately issued Limited Official Use Only report, we communicated detailed information regarding our findings to BPD management. We also assessed the general and application information security controls over key financial systems that the Federal Reserve Banks (FRB) maintain and operate on behalf of BPD. We will issue a separate report to the Board of Governors of the Federal Reserve System on the results from that assessment.
Our fiscal year 2009 audit procedures identified seven new general information security control deficiencies related to access controls and configuration management. In the Limited Official Use Only report, we made eight recommendations to address these control deficiencies. None of the control deficiencies we identified represented significant risks to the BPD financial systems. The potential effect of such control deficiencies on financial reporting relevant to the Schedule of Federal Debt was mitigated by BPD's physical security measures and a program of monitoring user and system activity, as well as compensating management and reconciliation controls designed to detect potential misstatements in the Schedule of Federal Debt. In addition, during our fiscal year 2009 follow-up on the status of BPD's corrective actions to address eight open recommendations related to general information security control deficiencies identified in prior years' audits, we determined that as of September 30, 2009, corrective action on five of the eight recommendations was completed, while corrective action was in progress on the three remaining open recommendations, which related to access controls and configuration management. BPD provided comments on the detailed findings and recommendations in the separately issued Limited Official Use Only report. In those comments, the Commissioner of BPD stated that of the 10 findings open as of September 30, 2009, 3 have been completely resolved and corrective actions for the remaining 7 are planned or in progress. The Commissioner also stated that BPD intends to implement corrective actions for 5 of the 7 remaining findings by September 2010, and the other 2 by December 2011.
