Federal Managers' Financial Integrity Act

The objectives of Section 2 and Section 4 (internal controls and financial accounting systems respectively) of the Federal Managers' Financial Integrity Act (FMFIA) of 1982 are in the process of being met by the HTF modes in FY 2004. All departmental organizations are subject to Sections 2 and 4 of the FMFIA.

For FY 2003, HTF had four material weaknesses. Two were related to Section 2 and two were associated with Section 4. The four material weaknesses that required corrective action by HTF agencies in FY 2004 were:

• The Department's information systems security
• The Department's intragovernmental account balances
• FTA controls over financial operations
• FHWA's controls over financial operations

During FY 2004, the material weakness for the Department's information systems security was changed to a reportable condition. With regard to the FHWA and FTA controls over financial operations material weaknesses, the agencies implemented a number of corrective actions, however, they were not in place for a sufficient period of time to ensure that weaknesses were resolved. For the FY 2004 financial statements, the following material weaknesses were identified. Two of these weaknesses are a continuation from FY 2003:

• The Department's intragovernmental account balances
• The Department's financial system security controls
• Financial management and reporting for Highway Trust Fund agencies
• Financial oversight of highway and transit grants

Identified below are the actions the modes have taken to correct the FY 2003 material weaknesses.

The Department's Information Systems Security

The Department's Intragovernmental Account Balances

FTA Controls Over Financial Operations

FHWA Controls Over Financial Operations

HTF Agency Implementation of FMFIA