Rapid Property, Plant, and Equipment (PP&E) Remediation: Clean Audit Restored for a Federal Agency

Upon coming into the agency in late FY 2024, Interclypse in partnership with its prime contractor and key federal civilian leaders, aggressively devised a plan to remediate the PP&E Material Weakness based on our 5-step corporate remediation strategy below:

1. Define Problem – collectively identified specific processes and controls that led to concerns with reporting PP&E additions, depreciation, and useful life determinations that required improvement.

2. Conduct Root Cause Analysis – performed thorough analysis to determine why the issues occurred, identifying all meaningful process, procedural, and system-related gaps among all key stakeholder groups. These gaps prevented accurate recognition timing and required a detailed PP&E useful life assessment.

3. Develop Remediation Plan – through strategic PMO-focused communication with agency leadership, combined with the understanding of change management aspects, we collaborated with the team to deliver a timely, comprehensive remediation plan that addressed both system/process weaknesses and accounting policy gaps. This plan included revised procedures, strengthened system controls, and a structured approach to reassessing useful lives for all PP&E, with bold yet achievable target dates (<2 months) to show tangible results in the current-year audit report.

4. Implement Solution – Interclypse, alongside its prime contractor, and key federal civilian leaders met all target dates to execute the comprehensive remediation plan and remove the PP&E audit finding from the audit report. The solution improved the accuracy of depreciation and useful life assumptions by conducting a comprehensive review. Then, we grouped the asset population into like-kind categories by engaging technical stakeholders to validate intended use and appropriate cost recovery periods. A detailed historical analysis was performed to update estimated useful lives as needed, and the agency strengthened documentation, controls, and ongoing monitoring while also overcoming a property reporting system deficiency to ensure consistent, audit-ready financial reporting.

5. Ongoing Monitoring – Interclypse continuously led interactions between all financial and PP&E accountability-focused stakeholders to ensure all additions, deletions, and adjustments were properly reflected on the financial statements based on documentation, controls, and ongoing monitoring efforts.